KATHMANDU, Sept 2: Nepal bought Indian rupees (INR) equivalent to Rs 535.23 billion by selling US dollars to finance the imports from the southern neighbor in the last fiscal year.
The records with Nepal Rastra Bank (NRB) show that Nepal spent US $ 4.54 billion to purchase the aforementioned amount of INR last year. In 2019/20, Nepal spent US $ 3.82 billion to purchase INR worth Rs 442.13 billion.
Almost every year, Nepal has to spend a large amount of US dollars to purchase the Indian currency due to the ever increasing import volume from the southern neighbor, many of which are luxury items. The landlocked country depends mostly on the remitted money sent by the migrant workers to maintain its reserves of the US dollars.
According to NRB, due to the widening trade deficit, with India in particular, the country’s spending of US dollars on the heading surged by a notable 19 percent last year. Of the total imports worth Rs 1.53 trillion, Nepal settled import bills of Rs 971.60 billion to India alone.
With the drain out of large amount of the US dollars triggered by the soaring imports, Nepal’s balance of payments registered a surplus of only Rs 1.23 billion in 2020/21, a straight fall from the surplus of Rs 282.41 billion in the previous year.