The Maoists have called for the blockade of essential items to the capital demanding the release of detained activists and an inquiry into the killing of others.
Despite heavy security arrangements by the government along the highways, few vehicles were seen carrying goods and passengers fearing Maoist attacks.
But police sources at Nagdhunga pass on Tribhuvan Highway, the major entry point to Kathmandu, said the situation had improved compared to yesterday.
Over 50 buses and trucks left Kathmandu towards western and eastern Nepal through Nagdhunga pass on Tribhuvan highway while 10 buses and trucks entered the capital from the pass so far, police said.
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Prices in Kathmandu's main vegetable market at Kalimati went up by over 30 per cent today, said eyewitnesses. Most of Kathmandu's vegetables, fruits and rice come from the Terai region and India, and these are transported over the highways.
The blockade also left many people stranded at the Gongabu bus stand, the major bus depot for long distance travellers in Kathmandu.
Compared to the Tribhuvan and Prithvi highways, there was more vehicular movement on the Arniko highway connecting Nepal with Tibet, police said. The government has provided escorting facility to vehicles plying on the highway with stepped up security arrangements.
But despite mobilisation of army and police, most vehicles stayed off the highways.
This is a result of fear psychosis, said Rajendra Thapa, Public Relations Director at the Royal Nepal Army Headquarters in Kathmandu. "We were ready to provide escort and other security arrangements to the vehicles plying on the highways."
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While a government official said there was enough food stock in Kathmandu to last a month, the Kathmandu Research Centre, a non-governmental organization said that each day of the blockade would cost the country Rs 50 million.
Addressing a function here, Deputy Prime Minister Bharat Mohan Adhikari told the Maoists not to daydream of blackmailing the government by imposing an economic blockade on people of Kathmandu.
The blockade follows the closure of operations by many top firms, including Indian companies, in Nepal after Maoists accused them of exploiting their employees.
On Monday, the rebels exploded bombs at a five-star hotel in Kathmandu partially owned by the Oberoi Group, after which the hotel closed its business, forcing over 400 guests, including some Indians, to move out to other places.
