KATHMANDU, Nov 17: Nepal’s foreign exchange reserves increased 2.5 percent to Rs 1246.22 billion in mid-October 2022 from Rs 1215.80 billion in mid-July 2022, according to the latest report of Nepal Rastra Bank (NRB).
The Current Macroeconomic and Financial Situation Report of Nepal released by the central bank on Wednesday states that the gross foreign exchange reserves in terms of US dollars decreased 0.6 percent to 9.48 billion in mid-October 2022 from 9.54 billion in mid-July 2022. The report is based on three months’ data ending Mid-October of the current fiscal year (FY 2022/23).
Of the total foreign exchange reserves, reserves held by NRB increased 4.3 percent to Rs 1101.60 billion in mid-October 2022 from Rs 1056.39 billion in mid-July 2022. Reserves held by banks and financial institutions (except NRB) decreased 9.3 percent to Rs 144.62 billion in mid-October 2022 from Rs 159.41 billion in mid-July 2022. The share of Indian currency in total reserves stood at 23.8 percent in mid-October 2022.
Foreign Exchange Adequacy Indicators
Foreign exchange reserves adequate to support commodity imports...
The central bank stated that based on the imports of three months of FY 2022/23, the foreign exchange reserves of the banking sector is sufficient to cover the prospective merchandise imports of 9.6 months, and merchandise and services imports of 8.3 months. The ratio of reserves-to-GDP, reserves-to-imports and reserves-to-M2 stood at 25.7 percent, 69.5 percent and 22.5 percent respectively in mid-October 2022.
Such ratios were 25.1 percent, 57.8 percent and 22.1 percent respectively in mid-July 2022.
Merchandise Trade
The merchandise exports of Nepal decreased 35.7 percent to Rs 41.82 billion in the first three months of the current fiscal year against an increase of 109.5 percent in the same period of the previous year, the NRB report further said.
Destination-wise, exports to India and China decreased 45.0 percent and 35.0 percent respectively whereas exports to other countries increased 5.0 percent. Exports of zinc sheet, particle board, woolen carpets, readymade garments, tea, among others, increased whereas exports of soybean oil, palm oil, oil cakes, jute goods, silverware and jewelries, among others, decreased in the review period.
During the three months of FY 2022/23, merchandise imports decreased 16.2 percent to Rs 401 billion against an increase of 63.7 percent a year ago. Destination-wise, imports from India, China and other countries decreased 14.8 percent, 16.7 percent, and 19.2 percent respectively. Imports of petroleum products, chemical fertilizer, sponge iron, medicine, coal, among others, increased whereas imports of transport equipment and parts, silver, telecommunication equipment and parts, crude soybean oil, MS wire rod, bars, coils and others, among others, decreased in the review period.
Based on customs points, exports from dry port, Jaleshwar, Kailali, Krishnanagar, Mechi and Tribhuwan Airport customs offices increased whereas exports from all the other major customs points decreased in the review period. On the import side, imports from dry port, Jaleshwar and Tatopani Customs Office increased whereas imports from all the other major customs points decreased in the review period.
Total trade deficit decreased 13.1 percent to Rs 359.18 billion during the three months of FY 2022/23. Such a deficit had increased 58.3 percent in the corresponding period of the previous year. The export-import ratio decreased to 10.4 percent in the review period from 13.6 percent in the corresponding period of the previous year.
During the three months of FY 2022/23, merchandise imports from India by paying convertible foreign currency amounted to Rs 34.59 billion. Such an amount was Rs 54.17 billion in the same period of the previous year. (RSS)
