From Idle Credit to AI Fever: A Tale of Two Economies

Hello and Namaste from Nepal!

We’re thrilled to bring you our latest edition of Nepali Dias Express, your trusted weekly digest of what’s happening back home, why it matters, and how it connects to Nepalis living around the world.

Nepali Updates

Banks Are Swimming in Cash, But No One Wants a Loan

You know how we always joke that Nepal’s economy runs on remittance and vibes? Well, this week it’s mostly just sitting on cash. Banks have collected a mountain of deposits; over Rs 6.7 trillion, but hardly anyone is taking loans.

In simple terms, people are putting money into banks, but very few are borrowing from them. The Nepal Rastra Bank allows banks to lend up to 90 percent of their deposits, but most are lending only around 70 percent, with Rastriya Banijya Bank sitting at 60.72 percent. That means a big chunk of money is just lying idle instead of moving through the economy.

And that’s not good news. When banks don’t lend, businesses can’t grow, new jobs aren’t created, and spending slows down. The whole system depends on money circulating, from banks to businesses to consumers and back again. A low CD ratio basically means that the cycle has jammed. It’s like everyone’s waiting for someone else to move first.

Powering Ahead: NEA Gets India’s Green Light

There is, however, some good news shining through, quite literally. Nepal Electricity Authority finally got India’s approval to renew exports of 283 megawatts of power from eight hydropower projects. The electricity will be sold in India’s real-time market and through bilateral deals with Haryana and Bihar. Some even goes to Bangladesh through India’s grid. It’s not massive, but it’s steady income in foreign currency, and a small yet significant reminder that Nepal’s energy story is actually maturing beyond slogans. Kul Man Ghising was in Delhi recently and seems to have pulled a few right strings. 

Japan to the Rescue (Again): Sindhuli Road Gets a Second Life

Meanwhile, Japan’s once again doing what Japan does best: fixing what’s broken. Remember the Sindhuli Road (BP Highway) that links Kathmandu to the eastern Terai? Last year’s floods wiped out more than ten kilometres of it. Now Japan’s giving Rs 2.6 billion in the form of grant to rebuild it. They built that road two decades ago, so this is basically them repairing their own gift. It’s a small project, but a big reminder of who actually shows up when our infrastructure collapses.

Nurses Take to the Streets for Fair Pay

And on the human side of things, nurses across Nepal are finally saying “enough.” For days they’ve been staging protests demanding fair pay and proper benefits. Many nurses in private hospitals earn less than half what their government counterparts make, sometimes as low as fifteen thousand a month. After intense pressure, the Health Ministry agreed that private hospitals must pay at least the same as government standards, or at least 80 percent if they’re smaller. But many nurses aren’t celebrating yet; they’ve seen too many promises vanish before payday. 

Global Updates

Nvidia Becomes the World’s First $5 Trillion Company

Nvidia just became the first company in the world to be worth $5 trillion. Yes, trillion with a “T.” This is the same company that once just made computer chips for gamers. Now it’s worth more than the entire economies of almost every country in the world, except the U.S. and China.

The reason is Artificial intelligence. Nvidia makes the chips that power almost everything AI-related, from ChatGPT and self-driving cars to robots and smart devices. Basically, if AI is the new gold rush, Nvidia is the one selling the shovels.

Its stock jumped again this week after Trump hinted he might allow the company to sell more chips to China, which is its biggest market. But not everyone is celebrating. Big institutions like the IMF and the Bank of England are warning that the hype around AI might be turning into a bubble, like the dot-com boom all over again.

Still, investors don’t seem to care. Wall Street is all in, cheering Nvidia on as it keeps breaking records. 

Trump and Xi Call a Time-Out

Meanwhile, in the world’s longest-running economic soap opera, Trump and Xi finally met again, and, shockingly, no one flipped the table. Trump came out calling it a “twelve out of ten” success (because of course he did), while Beijing’s version was more like, “Let’s keep talking and not make this awkward.”

The U.S. agreed to ease a few tariffs, and China promised to lift some restrictions on rare earth exports. It’s not a full peace deal, but at least everyone’s pretending to be civil again.

China, as always, is playing the long game. “struggle, but don’t break” seems to be their motto. They’ve been diversifying trade partners and reducing their dependence on the U.S, afterall. Trump, on the other hand, is in campaign mode, looking for a quick “we made a deal” headline. So while everyone’s loving the calm, no one really believes it’ll last. This feels less like a turning point and more like a short commercial break before Season 2 of the trade war.

Egypt Opens the Grand Museum (and It’s Jaw-Dropping)

After three decades, several revolutions, a pandemic, and enough delays to rival Kathmandu road projects, Egypt has finally opened its Grand Egyptian Museum, and it’s stunning. Located right beside the Giza Pyramids, it’s the world’s largest archaeological museum, home to over 100,000 artefacts covering 7,000 years of history.

The main attraction being every single item from King Tutankhamun’s tomb, displayed together for the first time ever; from his golden mask to his throne and chariots, basically everything. 

Canada Says Sorry (Again), This Time to Trump

You might remember last week’s drama when Trump slapped a 10% tariff on Canada over a TV ad that quoted Ronald Reagan. The ad, commissioned by Ontario’s Doug Ford, basically said tariffs are bad for business, which Trump took as a personal insult.

Now, Canadian Prime Minister Mark Carney has officially apologised. He reportedly pulled Ford aside, said “what were you thinking?”, and personally told Trump “sorry” at a dinner in South Korea. Trump says he accepts the apology, but also that trade talks “aren’t restarting anytime soon.” So yes, Canada got punished for being passive-aggressive on TV. Peak 2025 energy.

Until Next Week

Nepal’s banks took a nap, Nvidia woke up richer, and the trade war hit the snooze button (for now).

The world’s moving at two speeds, and we’ll be right here keeping the score. See you next week.