KATHMANDU, Nov 12: Private sector lending by Nepali banks and financial institutions (BFIs) increased by Rs 109.03 billion in the first three months of the current fiscal year.
In the review period this year, the BFIs lending to the private sector grew by 2.3 percent compared to an increase of Rs 59.11 billion (1.3 percent) in the corresponding period of last fiscal year. Amid the hue and cry by the private sector blaming the BFIs for ongoing recession, the increased credit to private businesses has pinned some positive message.
The BFIs have been blamed for their reluctance to increase lending for the private businesses. According to the Current Macroeconomic and Financial Situation Report of the country, unveiled by Nepal Rastra Bank (NRB), the BFIs lending to the private sector increased 4.8 percent just in the last one month.
Lending slows as banks focus on recovery of loans at fiscal yea...
Over the past year, the country improved in its external sector indicator while struggling to maintain balance in the internal sector’s financial situation. According to the NRB records, Nepal had its balance of payments (BoP) in surplus of Rs 99.07 billion in the first three months of the current fiscal year, a whopping rise in the positive balance in the same period last year.
According to the NRB, the surplus amount increased by Rs 75.57 billion in just last month. The notable improvement in one of the main external sector indicators is due to soaring remittance during the period.
The central bank’s records show that the country received as much as Rs 136 billion in remittances during mid-September and mid-October this year. In the first quarter, the country’s remittance inflows increased 30 percent to Rs 365.34 billion.
In the US Dollar terms, the BoP remained at a surplus of 747.2 million in the review period against a surplus of 91.8 million in the same period of the previous year. The current account, one of the main components of the BoP, registered a surplus of USD 445.2 million compared to a deficit of USD 276.7 million during the review period.
The capital transfer and net foreign direct investment (FDI) however appeared pathetic. While the capital transfer declined 55.6 percent to Rs 1.15 billion, the FDI inflow dropped heavily to Rs 3.37 billion from Rs 79.6 billion.
As a result of a notable rise in the BoP, the country’s foreign currency reserves increased 5.3 percent to USD 12.33 billion. The amount will be enough to finance 12.4 months of goods imports and 10.3 months of goods and services for the country, reads the NRB report.
