Nepal’s forex reserves escalate to record-high amount at $ 13.69 billion, sufficient for goods and services imports of 12.1 months

Published On: February 7, 2024 09:30 AM NPT By: Republica | @RepublicaNepal

Remittance inflow increases by 25.3 percent, current account surplus remains at Rs 161.62 billion

KATHMANDU, Feb 7: Nepal is cushioned with a notable rise in the foreign currency reserves as of mid-January, thanks to a significant increase in the remittance inflows in the past six months.

The ‘Current Macroeconomic and Financial Situation Report of Nepal’ unveiled by Nepal Rastra Bank (NRB) on Tuesday shows that the landlocked and import-oriented country now has foreign currency reserves of US $ 13.69 billion, sufficient to finance merchandise imports of 14.5 months, and merchandise and services imports of 12.1 months. In the past year, the amount increased by USD 3.19 billion.

The NRB report shows that the inflow of remittance increased by 25.3 percent during the six months of the current fiscal year. In the review period, the country received remittance worth Rs 733.22 billion.

Compared to the same period of the previous year, remittance inflow this year increased by 24.3 percent. In US dollar terms, the remittance inflow grew by 22.6 percent, reaching 5.52 billion. Last year, such transfers from abroad had increased by 13.9 percent.

During the review period, 207,970 Nepalis obtained the final work permit (institutional and individual-new) for foreign employment, while 135,435 renewed their work permits. In the same period of the previous year, these numbers were 275,643 and 142,548, respectively.

The net transfers saw an increase of 24 percent during the review period, reaching Rs 799.51 billion. Moreover, the current account demonstrated a surplus of Rs 161.62 billion during this period. In contrast, during the same period of the previous year, the current account had a deficit of Rs 35.57 billion.

Capital transfers decreased by 30 percent during the review period to Rs 3.11 billion, while net foreign direct investment remained positive at Rs 4.53 billion. In comparison, during the same period of the previous year, capital transfers stood at Rs 4.43 billion, and net foreign direct investment was at Rs 749.4 million.

Overall, the country’s balance of payments (BoP) remained at a surplus of Rs 273.52 billion, a significant increase from the surplus of Rs 92.14 billion recorded during the review period. In terms of US dollars, the BoP surplus was recorded at 2.06 billion, up from a surplus of 697.4 million in the review period, according to the NRB report.