Money foreign workers send home jumps by 25 percentRemittances rose to Rs733.22 billion in the first half of the current fiscal and the foreign exchange reserves ballooned to a record high of Rs1.81 trillion.
The remittance inflows to Nepal jumped by a staggering 25.3 percent to Rs733.22 billion year-on-year in the first half of the current fiscal year that ended mid-January, Nepal’s central bank said on Tuesday.
The robust growth in remittance has been attributed to the growth in migrant workers' departure from the country and the appreciation of the US dollar against the Nepali rupee.
According to the Nepal Rastra Bank, 343,405 individuals were issued foreign work permits in the first half of the current fiscal year. Among them, 207,970 were first timers.
With the remittance boom, the country’s gross foreign exchange reserves increased 18 percent to a record Rs1.81 trillion in mid-January 2024, from Rs1.53 trillion in mid-July 2023.
Of the total foreign exchange reserves, reserves held by the central bank increased by 18.9 percent to Rs1.60 trillion in mid-January. Similarly, reserves held by banks and financial institutions increased by 11.8 percent to Rs216.35 billion in mid-January 2024, from Rs193.59 billion in mid-July 2023.
The share of Indian currency in total reserves stood at 22.5 percent in mid-January.
The central bank said that the current account remained at a surplus of Rs161.62 billion in the review period against a deficit of Rs35.57 billion in the same period of the previous year.
The current account is the sum of net income from abroad, net current transfers, and the balance of trade.
The balance of payments remained at a surplus of Rs273.52 billion in the review period against a surplus of Rs92.15 billion in the same period of the previous year. The balance of payment is the statement of the inflow and outflow of goods, services, and assets.
According to the Ministry of Finance, the total expenditure of the government stood at Rs566.62 billion during the six months of 2023-24. Compared to the growth of 13.7 percent
in the last fiscal year, government expenditure decreased by 1.7 percent in the review period.
The recurrent expenditure, capital expenditure and financial expenditure amounted to Rs437.38 billion, Rs49.24 billion and Rs80 billion, respectively, in the review period.
Deposits at banks and financial institutions reached Rs377.07 billion (a rise by 6.6 percent) in the review period compared to an increase of Rs215.14 billion (4.2 percent) in the corresponding period of the previous year. On a year-on-year basis, deposits at banks and financial institutions expanded by 14.9 percent in mid-January.
The share of demand, savings and fixed deposits in total deposits stood at 6.8 percent, 26.8 percent and 59.9 percent, respectively, in mid-January.
Private sector credit from banks and financial institutions increased by 4 percent to Rs192.64 billion in the review period compared to an increment of Rs137.33 billion (3.0 percent) in the corresponding period of the previous year. On a year-on-year basis, credit to the private sector from banks and financial institutions increased by 4.9 percent in mid-January.
In the review period, private sector credit from commercial banks, development banks and finance companies increased by 4 percent, 4.4 percent and 2.4 percent, respectively.
In the review period, out of the total outstanding credit of the banks and financial institutions, 11.4 percent was against the collateral of current assets (such as agricultural and non-agricultural products) and 67.7 percent against land and building.
In the review period, outstanding loans of banks and financial institutions to the agricultural sector increased by 1.1 percent, production sector 8 percent, construction sector 4.1 percent, transportation, communication and public sector 10.6 percent, wholesale and retail sector 2 percent, service industry sector 4.5 percent and consumable sector by 7 percent.
During the review period, merchandise exports decreased by 7.2 percent to Rs74.97 billion compared to a decrease of 32 percent in the same period of the previous year.
Destination-wise, exports to India decreased by 12.8 percent whereas exports to China and other countries increased by 370.9 percent and 1.3 percent, respectively. Exports of zinc sheets, particle boards, juice, readymade garments, and ginger, among others, increased whereas exports of palm oil, soyabean oil, tea, woollen carpet, and rosin, among others decreased.
In the review period, merchandise imports decreased by 3.1 percent to Rs768.17 billion compared to a decrease of 20.7 percent a year ago.
Destination-wise, imports from India and other countries decreased by 2.4 percent and 25.7 percent, respectively, while imports from China increased by 34 percent.
Imports of readymade garments, electrical equipment, MS wire rods, bars, and coils, textiles, transport equipment, vehicle and other vehicle spare parts, among others increased whereas imports of gold, crude soyabean oil, crude palm oil, rice and paddy, petroleum products, among others, decreased.
The year-on-year consumer price inflation moderated to 5.26 percent in mid-January compared to 7.26 percent a year ago. Food and beverage category inflation stood at 5.77 percent whereas non-food and service category inflation stood at 4.85 percent in the review month.