Remittances and NEPSE: how money from abroad moves the share market

Nepalis working abroad sent home record remittances of NPR 2.36 trillion in the fiscal year to mid-July 2026 - about 36% of the whole economy. That money doesn't go straight into shares, but it shapes almost everything that does move NEPSE. This guide follows the chain from a worker's pay in Doha or Kuala Lumpur to the price of a share in Kathmandu.

How big remittances are

Measure	Latest
Remittances, FY 2082/83 (to mid-July 2026)	about NPR 2.36 trillion, up about 37% (about US$16.2 billion)
Share of GDP	about 36% - up from about 25% on average over the previous decade
From the Gulf countries	about 40% of the total
First month of FY 2083/84	NPR 215 billion, up about 21%
Foreign-exchange reserves (Aug 2026)	US$27.7 billion - about 23 months of imports

From Nepal Rastra Bank figures as reported in 2026; reserves from NRB data in MacroLens NP's economy page.

The chain: from a worker abroad to NEPSE

1. Money lands in banks. Remittances arrive in families' bank and wallet accounts. Whatever isn't spent at once becomes deposits.
2. Banks fill up with cash. With deposits rising faster than businesses want to borrow, banks sit on spare money. Nepal's banking system held about Rs 8.26 trillion of deposits against Rs 5.94 trillion of loans in mid-July 2026 - lending only about 71% of what they hold. Nepal Rastra Bank has been soaking up the surplus through deposit auctions and its own bonds.
3. Money gets cheap. With so much cash, banks cut what they pay and what they charge. By August 2026 the average deposit rate had fallen to about 3.15% and the average lending rate to about 6.48%, both down sharply on a year earlier; banks lend to each other at about 2.75%.
4. Shares look more attractive. When a fixed deposit pays 3%, a bank share yielding 4-5% in dividends, or a stock that might rise, looks better. Cheap loans against shares also let investors buy more.

Has it actually moved NEPSE?

Yes - but with a long lag, and not on its own. The clearest example is 2024: deposits had been piling up and rates falling since 2023, and in July 2024 NEPSE jumped about 35% in a single month, once lending rates had come down far enough. Our interest-rates study found NEPSE followed what banks charge borrowers, about a year after the interbank rate turned.

But 2026 shows the limit. Remittances are at a record and money has rarely been cheaper - yet NEPSE is roughly flat to slightly down over the past year, around 2,600. Cheap money gets the market moving only when investors also expect profits to grow. When companies' earnings are flat and some sectors are under strain, the extra cash sits in banks instead.

What could break the chain

• The Gulf. About 40% of remittances come from the Gulf, where the 2026 conflict has put jobs and projects at risk. So far inflows have kept rising, but a lasting hit there would drain the liquidity behind cheap rates.
• Fewer workers leaving. New foreign-employment approvals have fallen even as remittances rose - growth may be coming from higher pay and more formal channels, which can't rise forever.
• Imports. Nepal's import bill keeps growing; remittances pay for it. If imports outrun inflows, reserves and liquidity shrink.

What to watch

• Monthly remittance figures from NRB - a slowdown is an early warning for liquidity.
• Bank credit growth - when loans finally start growing faster than deposits, the surplus is being put to work, often a good sign for shares.
• Lending rates - the link to NEPSE runs through them. Follow them, the interbank rate and reserves on our economy page.
• Festival season - remittances peak before Dashain; see what NEPSE does around Dashain and Tihar.

This is general information and analysis, not investment advice. Figures come from Nepal Rastra Bank data as reported in 2026 and MacroLens NP's economy data.

Sources: Nepal Rastra Bank via ShareHub Nepal, Nepal Monitor, The Annapurna Express, Spotlight Nepal, Nepali Times, Ekantipur, Nepalnews and NEPSE Trading, 2026. Cover photo: A plane taking off from Tribhuvan International Airport by Bijay Chaurasia, CC BY-SA 4.0, via Wikimedia Commons.