February 22, 2024, Thursday
Nepal 1:37:26 pm

Nepal receives over one trillion rupees remittance in 11 months

The Nepal Weekly
July 11, 2023

Nepal has witnessed the highest remittance inflow so far. According to the current economic and financial situation of the country released by Nepal Rastra Bank (NRB) on Monday, Nepal received Rs 1.112 trillion in remittance in 11 months of the current fiscal year (mid-July 2022- mid- July, 2023). Last year the country’s remittance was only one trillion rupees, according to the NRB report.

According to NRB, the remittance inflow has increased by 22.7 percent. In the same period of the previous year, the remittance inflow increased by 4.1 percent. Remittance inflows in US dollars increased by 13.0 percent and reached USD 8.51 billion.

Last year, such flow increased by 1.8 percent. During the review period, the number of Nepalis who took the final work permit (institutional and individual-new) for foreign employment increased by 46.6 percent to 459,415.

Similarly, the number of Nepalis who re-took labor permits for foreign employment increased by 0.5 percent during the review period and reached 260,262. This number increased by 208.3 percent during the same period of the previous year.

Meanwhile, the Balance of Payment (BOP) remained at a surplus of Rs.228.98 billion in the first eleven months of the current fiscal year 2022-23 that had begun on July 17, 2022 and is ending within a week.

According to the Current Macroeconomic and Financial Situation report released by the Nepal Rastra Bank today, during the eleven months of the fiscal year 2022-23 (July 17, 2022 – July 16, 2023), the BoP remained at a surplus of Rs. 228.98 billion. This is a significant improvement compared to the deficit of Rs. 269.81 billion recorded in the same period of the previous year. In terms of US Dollars, the BoP surplus for the review period amounted to 1.74 billion, contrasting with a deficit of 2.26 billion reported in the same period of the previous year.

Similarly, the gross foreign exchange reserves registered a significant increase of 21.8 per cent, thus reaching Rs. 1480.87 billion in the review period compared to Rs. 1215.80 billion in the corresponding period last year. In terms of US dollars, the gross foreign exchange reserves experienced an 18.5 per cent surge, amounting to 11.30 billion in the review period as it was calculated at 9.54 billion in the previous corresponding period.

In mid-June 2023, the foreign exchange reserves held by the NRB increased by 25.1 per cent, reaching Rs. 1321.25 billion compared to Rs. 1056.39 billion in mid-July 2022. Simultaneously, the reserves held by banks and financial institutions, excluding the NRB, experienced a slight increase of 0.1 per cent, totaling Rs. 159.63 billion in mid-June 2023 compared to Rs. 159.41 billion in mid-July 2022. Additionally, the Indian currency accounted for 22.9 per cent of the total reserves in mid-June 2023.

In mid-June 2023, the year-over-year consumer price inflation remained steady at 6.83 per cent against 8.56 per cent the previous year. In the review period, the inflation rate for food and beverages was 5.66 per cent, while it was 7.76 per cent towards the non-food and service sector. In this period, there was a 16 per cent fall in imports while exports went by 22.7 per cent, resulting in a 15.2 per cent decrease in trade deficit compared to the corresponding period last year.

The report states that the foreign exchange reserves held by the banking sector are deemed sufficient to cover prospective merchandise imports for a period of 11.2 months, as well as merchandise and services imports for a period of 9.6 months.

Furthermore, the ratios of reserves-to-GDP, reserves-to-imports, and reserves-to-M2 were recorded at 27.5 per cent, 80.3 per cent, and 25.0 per cent respectively in mid-June 2023. These ratios reflect an increase compared to the figures of mid-July 2022, which stood at 24.6 per cent, 57.8 per cent, and 22.1 per cent respectively.

The data shows that expenditures of the federal government amounted to Rs.1176.07 billion and revenue collection was Rs.836.85 billion till the end of the first eleven months of the current fiscal year.