The report also stated that both the rise in trade deficit and slow growth of remittance were the major factors behind the current account deficit.[break]
The remittance income increased by 7.8 percent during the review period compared to the growth of 35.3 percent recorded in the same period last year. The central bank also stated that the gross foreign exchange reserves stood at Rs 267.85 billion in mid-August 2010, up by 0.5 percent compared the figure at mid-July 2010.
Nepal´s exports declined by 17.2 percent compared to the rise of 15.6 percent in the corresponding period of the previous year, the report states. Of the total exports, exports to India increased by 12.1 percent during the review period compared to a rise of 6.8 percent recorded in the same period a year earlier. Exports to other countries, however, declined by a whopping 44.8 percent in contrast to the rise of 25.4 percent in the same period last year.
According to the report, the rise in exports to India can be attributed to the rise in the exports of jute goods, M S pipe, herbal medicines, oil cakes and plastic utensils, among others. Exports to other countries declined due to drop in the exports of pulses, Nepalese paper and paper products, pashmina, silverware and jewelries, and medicinal herbs, among others.
Total imports increased by 19.4 percent during the review month compared to a growth of 19.0 percent in the corresponding period of the previous year. Import from India increased by 34.3 percent in the review period, compared to a growth of 16.6 percent in the same period last year.
However, imports from other countries declined by 2.1 percent in the first month of current fiscal year, compared to a significant growth of 22.5 percent recorded in the same period last year.
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