Kathmandu, April 17 -- The weighted average lending rate charged by banks and financial institutions in Nepal has fallen to 6.90 percent, marking the lowest level on record.

The rate had climbed as high as 13.03 percent in the fiscal year 2022-23 before entering a sustained downward trend, according to the latest data released by Nepal Rastra Bank for mid-March. The decline reflects a broader shift in monetary conditions, driven largely by excess liquidity in the banking system and subdued demand for credit.

Officials at the central bank and financial sector analysts say the current lending rate represents a historic low. However, they caution that this average does not translate directly into borrowing costs for all customers. Interest...