Nepal’s Second Sovereign Credit Rating Put on Hold due to Unrest

Nepal’s plan to secure a second sovereign credit rating has been delayed indefinitely as political turmoil and the Gen Z protest unsettle the economy, the Ministry of Finance confirmed.

The ministry said global rating agency Fitch had scheduled a country visit for September 8–9 to assess Nepal’s economic and fiscal conditions. However, the team cancelled the visit after nationwide protests escalated. The assessment was to be conducted with the support of Standard Chartered Bank, and the government had already completed the required preparations.

Finance Ministry spokesperson Tanka Prasad Pandey said the visit is now on hold with no new date set. “Our preparations were complete, but the Fitch team postponed the visit due to the unrest,” he noted.

A senior official of the ministry said the Gen Z protests have already affected economic activity, while upcoming national elections add further instability. The government fears that a rating at this time could produce a lower score, sending negative signals to international markets.

“Both private and public sector conditions are considered in a rating. A positive result is unlikely now,” the official explained.

Officials stressed that a weaker rating would harm Nepal’s international credibility, so rushing the process is not a wise decision. Fitch previously assigned Nepal a “BB-” rating last year, which reflects the country’s debt-servicing capacity and is closely watched by global investors and donor agencies.

Nepal is currently on the Financial Action Task Force’s (FATF) “grey list” for anti–money laundering concerns, another factor expected to weigh on any new assessment. The government had hoped an improved credit rating would help lower international borrowing costs, attract foreign direct investment, and enhance the nation’s economic profile.

For now, authorities intend to wait for political stability and clearer economic signals before pursuing the next sovereign credit evaluation.