Nepal’s net forex earnings grew by USD 200 million during one month of mid-January to mid-February

Published On: March 13, 2023 08:30 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, March 13: Nepal gained net foreign currency earnings of US $ 200 million in the past one month during mid-January and mid February, mainly due to a notable rise in the remittance earnings of the country.

According to the latest report of Nepal Rastra Bank (NRB), the country’s foreign exchange (forex) reserves grew to $ 10.50 billion from $ 10.30 billion in the review month of the current fiscal year. Compared to the amount as of mid-July 2022, the forex reserves grew 10.2 percent.

The forex reserves can fund the country’s merchandise and services imports of 9.4 months. Until the previous month, the adequacy of forex reserves for imports was 9.1 months.   

The NRB record shows that the remittance earnings increased by Rs 104.80 billion in the past one month. Overall, remittance inflow grew by 27.1 percent during mid-July and mid-February.

Despite a rise in earnings of the net forex reserve, the current account deficit however increased to Rs 29.64 billion from Rs 29.47 billion in the past one month. Current account is one of the major components of the balance of payments (BoP), which is one of the main macroeconomic indicators that record a country’s financial transactions with the rest of the world. Capital account and financial account are other two measures of the BoP.  

Overall, the country’s BoP remained at a surplus of Rs 133.21 billion as of mid-February. Until the previous month, the BoP surplus was recorded at Rs 97.10 billion.

Meanwhile, Nepal’s trade deficit declined 18.7 percent to Rs 825.73 billion during mid-July and mid-February in the current fiscal year. During the period, merchandise exports decreased 29 percent to Rs 93.43 billion. Likewise, the merchandise imports decreased 19.9 percent to Rs 919.17 billion. In the review period last year, the country’s expense of imports soared 42.8 percent.    

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