May 27, 2024, Monday
Nepal 1:37:26 pm

Foreign exchange reserves cross Rs. 1,900bn, adequate for over one year’s import

The Nepal Weekly
May 14, 2024

There has been a further improvement in the external sector of the economy.

A steady improvement has been witnessed in foreign currency reserves, balance of payment, current account and remittance inflows during the first nine months of the current fiscal year 2023/24.

According to the current macroeconomic and financial status report published by the Nepal Rastra Bank on Sunday, the foreign currency reserve of the first nine months of the current fiscal year can foot the import of goods and services for more than one year.

The foreign current reserves reached an all-time high of Rs. 1,911.86 billion during the first nine months of the current fiscal year. Foreign currency reserves added about Rs. 39.04 billion during a single month (mid-March 2024 to mid-April 2024). The foreign currency reserve was Rs. 1,872.82 billion in mid-March 2024.

According to the NRB, the gross foreign exchange reserves increased by 24.2 per cent to Rs. 1,911.86 billion in mid-April 2024 from Rs. 1,539.36 billion in mid-July 2023.

In the US dollar terms, the gross foreign exchange reserves increased by 22.7 per cent to 14.36 billion in mid-April 2024 from 11.71 billion in mid-July 2023.

Of the total foreign exchange reserves, reserves held by NRB increased by 25.4 per cent to Rs. 1,688.21 billion in mid-April 2024 from Rs. 1,345.78 billion in mid-July 2023.

Reserves held by banks and financial institutions (except NRB) increased by 15.5 per cent to Rs. 223.65 billion in mid-April 2024 from Rs. 193.59 billion in mid-July 2023.

The share of Indian currency in total reserves stood at 21.6 per cent in mid-April 2024. The ratio of reserves-to-GDP, reserves-to-imports and reserves-to-M2 stood at 33.5 per cent, 104 per cent and 28.9 percent respectively in mid-April 2024.  Such ratios were 28.8 per cent, 83.0 per cent and 25 per cent respectively in mid-July 2023.

Remittance of Rs. 121 billion received in a single month

As per the report, remittance inflows increased by 19.8 per cent to Rs. 1,082.62 billion in the review period compared to an increase of 24.2 per cent in the same period of the previous year.

In the US dollar terms, remittance inflows increased by 17.7 per cent to 8.15 billion in the review period compared to an increase of 13.9 per cent in the same period of the previous year.

The report showed that remittance of Rs. 121.4 billion has been acquired in a single month from mid-March 2024 to mid-April 2024 of the current fiscal year.

During the review period, the number of Nepali workers, both institutional and individual, taking first time approval for foreign employment recorded 329,422 and taking approval for renew entry recorded 212,721. In the previous year, such numbers were 387,839 and 217,959 respectively.

Net transfer increased by 17.8 per cent to Rs. 1174.50 billion in the review period. Such transfer had increased by 22.8 percent in the same period of the previous year.