Nepal receives record-high remittance of Rs 116.02 billion in the first month of current FY

Current account posts three-year record with surplus of Rs 12.99 billion

KATHMANDU, Sept 18: Nepal received a one-month record high remittance of Rs 116.02 billion in the first month of the current fiscal year.

According to the ‘Current Macroeconomic and Financial Situation Report of Nepal’ unveiled by Nepal Rastra Bank (NRB) on Sunday, the remittance inflow during the review period soared by 25.8 percent this year compared to the average of 20.3 percent in the same period last year. In terms of US dollar, the remittance amount increased 21.5 percent to US $ 879.8 million, compared to an increment of 12.5 percent in the review month of the fiscal year 2022/23.  

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With an exorbitant growth in the inflow of the foreign currencies, the country’s current account maintained a positive balance in the past three years. According to the NRB, the current account surplus in the review month stood at Rs 12.99 billion. Earlier, the country’s current account was positive in November 2020.

Likewise, the balance of payments (BoP) of the country stood at a positive Rs 32.90 billion in the first month of the current fiscal year. In the review period last year, the BoP was in deficit of Rs 19.76 billion.

According to the NRB records, the improvement in the external sector’s indicator was mainly due to an increase in the net inflow triggered by the excessive earnings from remittance. In addition, a decline in the trade deficit has also aided in this regard. In the review month, the imports declined 1.8 percent to Rs 129.24 billion.

As a result, Nepal’s gross foreign exchange reserves increased 2.2 percent to Rs 1,573.12 billion in mid-August 2023 from Rs 1,539.36 billion in mid-July 2023. In the US dollar terms, the gross foreign exchange reserves increased 1.2 percent to $11.85 billion in mid-August 2023.

The foreign exchange reserve is sufficient to cover the prospective merchandise imports of 12.5 months, while merchandise and services imports of 10.3 months, according to the central bank.