Kathmandu: Nepal Rastra Bank, Nepal’s central bank, has said that remittances inflow has increased by 23 percent in NPR terms in the first five months ending mid-December of the current fiscal year 2022/23.
Remittance has been one of the most important source of foreign exchange for several years. It was a increase of 13.1% in US Dollor terms.
According to the macroeconomic and financial situation of the country, the Balance of Payments remained at a surplus of Rs.45.87 billion. Likewise, gross foreign exchange reserves stood at NPR 1292.56 billion and 9.82 billion in USD terms.
Remittances
Remittance inflows increased 23.0 percent to Rs.480.50 billion in the review period against a decrease of 6.3 percent in the same period of the previous year. In the US Dollar terms, remittance inflows increased 13.1 percent to 3.71 billion in the review period against a decrease of 6.8 percent in the same period of the previous year.
Net transfer increased 21.6 percent to Rs.530.06 billion in the review period. Such a transfer had decreased 5.3 percent in the same period of the previous year.
Current Account and Balance of Payments
The current account remained at a deficit of Rs.37.91 billion in the review period compared to a deficit of Rs.298.51 billion in the same period of the previous year. In the US Dollar terms, the current account registered a deficit of 297.2 million in the review period compared to deficit of 2.51 billion in the same period last year.
In the review period, capital transfer decreased 25.3 percent to Rs.3.47 billion and net foreign direct investment (FDI) remained Rs.604.9 million. In the same period of the previous year, capital transfer and net FDI amounted to Rs.4.64 billion and Rs.7.07 billion respectively.
Balance of Payments (BOP) remained at a surplus of Rs.45.87 billion in the review period compared to a deficit of Rs.195.01 billion in the same period of the previous year. In the US Dollar terms, the BOP remained at a surplus of 346.8 million in the review period against a deficit of 1.64 billion in the same period of the previous year.
Foreign Exchange Reserves
Gross foreign exchange reserves increased 6.3 percent to Rs.1292.56 billion in mid-December 2022 from Rs.1215.80 billion in mid-July 2022. In the US dollar terms, the gross foreign exchange reserves increased 3.0 percent to 9.82 billion in mid- December 2022 from 9.54 billion in mid-July 2022.
Of the total foreign exchange reserves, reserves held by NRB increased 7.8 percent to Rs.1139.22
billion in mid-December 2022 from Rs.1056.39 billion in mid-July 2022. Reserves held by banks and financial institutions (except NRB) decreased 3.8 percent to Rs.153.34 billion in mid- December 2022 from Rs.159.41 billion in mid-July 2022.
The share of Indian currency in total reserves stood at 22.9 percent in mid-December 2022.
Foreign Exchange Adequacy Indicators
Based on the imports of five months of 2022/23, the foreign exchange reserves of the banking sector is sufficient to cover the prospective merchandise imports of 10.0 months, and merchandise and services imports of 8.7 months.
The ratio of reserves-to-GDP, reserves-to- imports and reserves-to-M2 stood at 26.6 percent, 72.6 percent and 23.0 percent respectively in mid-December 2022. Such ratios were 25.1 percent, 57.8 percent and 22.1 percent respectively in mid-July 2022.
Current-Macroeconomic-and-Financial-Situation-English-Based-on-Five-Months-data-of-2022.23-edited
