May 21, 2024, Tuesday
Nepal 1:37:26 pm

Foreign currency reserve increases by 13.8 per cent

The Nepal Weekly
March 14, 2023

A significant improvement has been seen in the country’s foreign currency reserves in the first seven months of the current fiscal year.

The country’s total foreign currency reserve has reached Rs 1383.33 billion in the first seven months of the current fiscal year (2022-23) as compared to the same period last year, with a rise of 13.8 per cent.

According to the Nepal Rastra Bank, gross foreign exchange reserves increased by 13.8 per cent to touch Rs 1383.33 billion in mid-February 2023 from Rs 1215.80 billion recorded in mid-July 2022.

In the US dollar terms, such reserves increased by 10.2 per cent and reached USD 10.50 billion from USD 9.54 billion in the given time period.

Of the total foreign exchange reserves, reserves held by NRB increased by 16.2 per cent to Rs 1228.05 billion in mid-February 2023 from Rs 1056.39 billion in mid-July 2022. Likewise, THE reserves held by banks and financial institutions (except NRB) fell by 2.6 per cent to stand at Rs 155.28 billion in mid-February 2023 from Rs 159.41 billion in mid-July 2022.

The share of Indian currency in the total forex reserves stood at 22.4 per cent in mid-February 2023, according to the central bank data.

Based on the imports of seven months of 2022/23, the foreign exchange reserves of the banking sector is sufficient to cover the prospective merchandise imports of 10.8 months, and merchandise and services imports of 9.4 months. The ratio of reserves-to-GDP, reserves-to imports and reserves-to-M2 stood at 28.5 per cent, 78.3 per cent and 24.0 per cent respectively in mid-February 2023. Such ratios were 25.1 per cent, 57.8 per cent and 22.1 per cent respectively in mid-July 2022.