The improving foreign currency reserves, balance of payment, current account and remittance inflows has been seen until mid-June of the current fiscal year 2022/23.
The current macroeconomic and financial report based on 11 months of the current fiscal year made public by Nepal Rastra Bank (NRB) on Monday showed that there has been further improvement in remittance inflows, foreign currency reserves and balance of payment.
Remittance earning crosses Rs. 1,100 billion
Remittance inflows increased by 22.7 per cent to Rs. 1,112.52 billion in the review period compared to an increase of 4.1 per cent in the same period of the previous year.
In the US dollar terms, remittance inflows increased by 13 per cent to 8.51 billion in the review period compared to an increase of 1.8 per cent in the same period of the previous year.
The country has received remittance of Rs. 107.34 billion in the month of Jestha (from mid-May to mid-June) alone. The country received remittance of around Rs. 102 billion in the month of Baishak (from mid-April to mid-May) alone.
This means that remittances are coming to the country on an average of over Rs. 100 billion every month.
The number of Nepali workers (institutional and individual-new) taking approval for foreign employment increased by 46.6 per cent to 459,415 in the review period.
The number of Nepali workers (renew entry) taking approval for foreign employment increased by 0.5 per cent to 260,262 in the review period. It had increased by 208.3 per cent in the same period of the previous year.
Net transfer increased by 21.9 per cent to Rs. 1,229.82 billion in the review period. Such transfer had increased by 3.8 per cent in the same period of the previous year.
Foreign exchange reserves reach Rs. 1,480 billion
According to the report, the gross foreign exchange reserves increased by 21.8 per cent to Rs. 1,480.87 billion in mid-June 2023 from Rs. 1,215.80 billion in mid-July 2022.
In the US dollar terms, the gross foreign exchange reserves increased by 18.5 per cent to 11.30 billion in mid-June 2023 from 9.54 billion in mid-July 2022.
Of the total foreign exchange reserves, reserves held by NRB increased by 25.1 per cent to Rs. 1321.25 billion in mid-June 2023 from Rs. 1056.39 billion in mid-July 2022.
Reserves held by banks and financial institutions (except NRB) increased by 0.1 per cent to Rs. 159.63 billion in mid-June 2023 from Rs. 159.41 billion in mid-July 2022.
The share of Indian currency in total reserves stood at 22.9 per cent in mid-June 2023.
Based on the imports of 11 months of 2022/23, the foreign exchange reserve of the banking sector is sufficient to cover the prospective merchandise imports of 11.2 months and merchandise and service imports of 9.6 months, said the NRB.
Improvement in both current account and BOP
Meanwhile, there has been improvement in the current account during the review period even though it remained in deficit.
The current account remained at a deficit of Rs. 69.40 billion in the review period compared to a deficit of Rs. 592.14 billion in the same period of the previous year.
In US dollar terms, the current account registered a deficit of 536.1 million in the review period compared to the deficit of 4.93 billion in the same period last year.
In the review period, capital transfer decreased by 22.5 per cent to Rs.7.35 billion and net foreign direct investment (FDI) recorded Rs. 4.65 billion.
In the same period of the previous fiscal year, capital transfer and net FDI amounted to Rs. 9.49 billion and Rs. 17.35 billion respectively.
The Balance of Payments (BOP) remained at a surplus of Rs. 228.98 billion in the review period compared to a deficit of Rs. 269.81 billion in the same period of the previous year.
In US dollar terms, the BOP remained at a surplus of 1.74 billion in the review period against a deficit of 2.26 billion in the same period of the previous year.
