Remittances set record at Rs. 137 billion in Asoj

By Laxman Kafle,Kathmandu, Nov. 11: Nepal received a record high remittance around of Rs. 137 billion in a single month (from September 18 to October 17).

According to the current macroeconomic and financial situation report published by Nepal Rastra Bank on Friday, the country has received a remittance of around Rs. 136.97 billion in the month of Asoj.

Remittance inflows increased by 30 per cent to Rs. 365.34 billion in the review period compared to an increase of 16.8 per cent in the same period the previous year. In US dollar terms, remittance inflows increased by 25.9 per cent to 2.76 billion in the review period compared to an increase of 7.9 per cent in the same period of the previous year.

Information Officer of the NRB Dr. Dilli Ram Pokhrel said that the inflow of remittance set a record in a single month in Asoj.

“The growing use of digitalisation, increasing trend to send remittance through the formal channels and increasing the number of migrant workers are the main reasons behind the increased inflow of remittance in the country,” he said. 

As the foreign workers send money to Nepal as the dollar strengthens, the recent improvement in the exchange rate of the dollar may have also increased the remittance inflow.

In the month of Asoj, a large amount of remittances come in to celebrate the festival in Nepal.

The country received a remittance of Rs. 116.02 billion in the month of Shrawan (July 17 to August 17) and Rs. 112.35 billion in the month of Bhadra (from mid-August to mid-September) alone.

In the review period, the number of Nepali workers, both institutional and individual, taking first-time approval for foreign employment stands at 113,397 and getting approval for the renewed entry stands at 49,297. In the previous year, such numbers were 147,932 and 57,861 respectively. Net transfer increased by 30.2 per cent to Rs. 404.04 billion in the review period. Such a transfer had increased by 17.1 per cent in the same period the previous year. 

Foreign exchange reserves reach Rs. 1,643 billion

With the continuous improvement in remittance inflows, the external sector of the country has seen a further improvement. According to NRB, gross foreign exchange reserves increased by 6.7 per cent to Rs. 1,643.09 billion in mid-October 2023 from Rs. 1,539.36 billion in mid-July 2023. 

In US dollar terms, the gross foreign exchange reserves increased by 5.3 per cent to 12.33 billion in mid-October 2023 from 11.71 billion in mid-July 2023.

Of the total foreign exchange reserves, the reserves held by NRB increased by 6.5 per cent to Rs. 1,433.36 billion in mid-October 2023 from Rs. 1,345.78 billion in mid-July 2023.  Reserves held by banks and financial institutions (except NRB) increased by 8.3 per cent to Rs. 209.73 billion in mid-October 2023 from Rs. 193.59 billion in mid-July 2023. 

The share of Indian currency in total reserves stood at 22 per cent in mid-October 2023. 

Based on the imports of three months of 2023/24, the foreign exchange reserves of the banking sector are sufficient to cover the prospective merchandise imports of 12.4 months, and merchandise and services imports of 10.3 months.

Improvement in BOP and current account surplus 

Meanwhile, the balance of payments (BOP) remained at a surplus of Rs. 99.07 billion in the review period against a surplus of Rs. 12.43 billion in the same period of the previous year. 

In the US dollar terms, the BOP remained at a surplus of 747.2 million in the review period against a surplus of 91.8 million in the same period the previous year. 

Similarly, the current account remained at a surplus of Rs. 59.09 billion in the review period against a deficit of Rs. 35.24 billion in the same period the previous year. 

In US dollar terms, the current account registered a surplus of 445.2 million in the review period against a deficit of 276.7 million in the same period last year. 

In the review period, capital transfer decreased by 55.6 per cent to Rs. 1.15 billion and net foreign direct investment (FDI) remained positive at Rs. 3.37 billion. 

In the same period the previous year, capital transfer amounted to Rs. 2.59 billion and net FDI amounted to Rs.79.6 million.