KATHMANDU, Dec 20: While the country is already feeling the heat of depleting foreign currency reserves, a total of US $ 1.36 billion was spent to buy Indian currency (INR) to fund imports from the southern neighbor during the first four months of the current fiscal year. It was around 12 percent more than the amount spent in the review period last year for the purpose.
According to the ‘Current Macroeconomic and Financial Situation’ report unveiled by Nepal Rastra Bank (NRB), it offloaded the aforementioned amount of the USD to purchase the INR equivalent to Rs 161.84 billion to the Reserve Bank of India. During mid-July and mid-November last year, the central bank sold USD 1.22 billion to purchase INR worth Rs 144.69 billion.
Every year, the central bank has to sell a large amount of USD to purchase Indian currency just to manage adequate funds to import goods from India. The NRB records show that imports from India stood 59 percent of the total imports worth Rs 650.29 billion.
In the review period, Nepal imported goods worth Rs 385.95 billion, a 46.1 percent increase, from India alone. The landlocked country faced a trade deficit of Rs 319.01 billion with its main trading partner country.