Forex reserves enough to pay for 12.5 months’ importsNepal’s central bank report says that the year-on-year consumer price inflation stood at 7.52 percent in mid-August 2023.
The gross foreign exchange reserves of the country increased by 2.2 percent to Rs1.57 trillion in the first month of the current fiscal year from Rs1.53 trillion in the same period last fiscal year, according to the central bank report released on Sunday.
Of the total foreign exchange reserves, reserves held by the Nepal Rastra Bank increased by 2.9 percent to Rs1.38 trillion. Reserves held by banks and financial institutions (except Nepal Rastra Bank) decreased by 2.9 percent to Rs187.89 billion in mid-August 2023 from Rs193.59 billion in mid-July 2023.
The share of Indian currency in total reserves stood at 21.9 percent in mid-August 2023.
Based on the imports of the first month of 2023-24, the foreign exchange reserves of the banking sector are sufficient to cover prospective merchandise imports for 12.5 months and merchandise and services imports for 10.3 months.
The central bank report said that the current account remained at a surplus of Rs12.99 billion in the first month of the current fiscal year against a deficit of Rs15.13 billion in the same period of the last fiscal year.
In the review period, Nepal received net foreign direct investment (FDI) of Rs2.65 billion.
The balance of payments remained at a surplus of Rs32.90 billion in the review period against a deficit of Rs19.76 billion in the same period of the previous year.
Remittance inflows increased 25.8 percent to Rs116.02 billion in the review period compared to an increase of 20.3 percent in the same period of the previous year.
In US dollar terms, remittance inflows increased 21.5 percent to $879.8 million in the review period compared to an increase of 12.5 percent in the same period of the previous year.
The number of Nepali workers (institutional and individual-new) taking approval for foreign
employment decreased by 12.1 percent to 39,152 in the review period. The number of Nepali workers (renewed entry) taking approval for foreign employment decreased by 19.5 percent to 16423 in the review period.
It had increased by 75.4 percent in the same period of the previous year.
During the first month of 2023-24, merchandise imports decreased by 1.6 percent to Rs129.24 billion compared to a decrease of 12.9 percent a year ago.
Destination-wise, imports from India and China increased by 3.3 percent and 17.0 percent respectively while imports from other countries decreased by 23.1 percent.
Imports of rice, paddy, MS wire rods, bars, coils and others, chemical fertiliser, hot rolled sheet in coil, and electrical goods, among others, increased whereas imports of petroleum products, crude soybean oil, crude palm oil, medicine, MS billet, among others decreased in the review period.
During the first month of 2023-24, merchandise exports decreased by 8.7 percent to Rs13.53 billion compared to a decrease of 28.7 percent in the same period of the previous year.
Destination-wise, exports to India decreased by 20.8 percent whereas exports to China and other countries increased by 527.2 percent and 15.4 percent respectively.
Exports of cardamom, zinc sheet, particle board, juice, and ginger increased whereas exports of palm oil, soybean oil medicine (ayurvedic), pashmina, silverware and jewellery, among others decreased in the review period.
The year-on-year consumer price inflation stood at 7.52 percent in mid-August 2023
compared to 8.26 percent a year ago.
Food and beverage inflation stood at 8.95 percent whereas non-food and service inflation stood at 6.42 percent in the review month.
Under the food and beverage category, the year-on-year price index of the spices sub-category increased by 45.56 percent, cereal grains and their products by 13.20 percent and milk products and eggs by 12.19 percent.
Similarly, year-on-year inflation of restaurants and hotels increased by 11.05 percent, and vegetables by 10.80 percent. However, the inflation of ghee and oil decreased by 15.13 percent.