Cheap Money, Costly Mistakes: What Nepal's Liquidity Surplus Really Means for Your Portfolio
Summary
Nepal’s banking system is awash with liquidity, pushing deposit rates down and sending more idle cash into NEPSE and other assets. The article warns investors to distinguish between sentiment-driven rallies and companies with real earnings and contracted cash flows.
Key Points
- Commercial banks in Kathmandu are offering very low deposit rates as excess liquidity piles up in Nepal’s banking system.
- The liquidity surplus is helping drive money into shares, with NEPSE rallies increasingly influenced by sentiment rather than fundamentals.
- Hydropower and non-life insurance stocks are highlighted as key sectors showing sharp sentiment and valuation swings.
- The piece advises investors to watch the credit-to-deposit ratio and focus on fundamentally sound, earnings-backed holdings.
-2.png)