Kathmandu, June 9: Nepal’s external sector showed strong improvement in the first ten months of the FY 2025/26, with the current account, balance of payments (BoP), and foreign exchange reserves all recording significant surpluses and growth, according to macroeconomic data released by Nepal Rastra Bank.
The current account posted a surplus of Rs. 729.28 billion, more than double the Rs. 272.53 billion recorded in the same period last year. In US dollar terms, the surplus rose to USD 5.05 billion, up from USD 2.01 billion a year earlier.
Similarly, the balance of payments (BoP) remained strongly positive at Rs. 863.56 billion, compared to Rs. 438.52 billion in the previous year. In dollar terms, the BoP surplus increased to USD 5.98 billion, up from USD 3.23 billion.
Net capital transfers increased to Rs. 14.65 billion, compared to Rs. 8.48 billion a year earlier. Foreign direct investment (equity only) also rose to Rs. 16.96 billion, up from Rs. 10.58 billion in the same period last year, indicating improved external inflows despite modest investment levels.
Foreign exchange reserves jump 38%
Gross foreign exchange reserves surged by 38.3 percent to Rs. 3704.55 billion by mid-May 2026, up from Rs. 2677.68 billion in mid-July 2025. In US dollar terms, reserves increased to USD 24.19 billion, compared to USD 19.50 billion previously.
Reserves held by Nepal Rastra Bank rose by 36.6 percent to Rs. 3298.38 billion, while reserves held by banks and financial institutions increased sharply by 54.4 percent to Rs. 406.17 billion. Indian currency accounted for 20.6 percent of total reserves.
Based on current import levels, foreign exchange reserves are sufficient to cover 22.6 months of merchandise imports and 19.2 months of goods and services imports, reflecting strong external stability.
Key adequacy indicators also improved significantly. The reserves-to-GDP ratio rose to 60.7 percent, reserves-to-imports to 159.7 percent, and reserves-to-M2 to 43.3 percent, all higher than the previous year’s levels. #nepal
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