Kathmandu-Interest rates across Nepal's financial system continued to decline during the first 11 months of the fiscal year 2025.26, according to the Nepal Rastra Bank's Current Macroeconomic and Financial Situation Report for the period ending mid June 2026.

Compared to the same period last fiscal year, weighted average rates on Treasury bills, interbank lending, base rates, deposits, and loans all declined.

The weighted average lending rate of commercial banks fell to 6.64 percent by mid June 2026, down from 7.99 percent a year earlier.

Similarly, the lending rate of development banks declined to 7.71 percent from 9.40 percent, while that of finance companies dropped to 8.90 percent from 10.22 percent, bringing it below double digits.

According to the central bank, the weighted average interest rate on 91 day Treasury bills declined to 2.64 percent by mid June 2026 from 2.94 percent in the corresponding period of the previous fiscal year.

The weighted average interbank rate also fell to 2.73 percent from 2.99 percent over the same period.

Banks' average base rates also recorded a notable decline. The average base rate of commercial banks dropped to 4.88 percent by mid June 2026 from 6.09 percent a year earlier.

Likewise, the average base rate of development banks decreased to 6.86 percent from 8.29 percent, while that of finance companies fell to 7.16 percent from 9.02 percent.
With liquidity conditions improving, weighted average deposit rates also eased across financial institutions.

The weighted average deposit rate of commercial banks declined to 3.29 percent from 4.29 percent in the previous year.

Similarly, deposit rates at development banks fell to 3.62 percent from 5.02 percent, while finance companies saw their average deposit rate decline to 4.46 percent from 6.09 percent.