BoP in surplus; remittance inflows, foreign exchange reserves increase

Kathmandu, Jan 9: The gross foreign exchange reserves, government's current account and balance of payments, and remittance inflows witnessed significant improvement in the first five months of the current fiscal year 2082/83 BS. 

Releasing the Current Macroeconomic and Financial Situation of Nepal based on five month data ending mid-December, the Nepal Rastra Bank (NRB) stated that the external sector of the nation's economy remained in a comfort position but the revenue collection, budget spending and credit expansion stood weak. 

"Gross foreign exchange reserves stood at Rs 3201.47 billion. Such reserve remained 22.13 billion in USD terms. The reserve is sufficient to cover the prospective merchandise and services imports of 18.2 months," according to the central bank.

It said that the current account and balance of payments remained at a surplus of Rs 358.83 billion and Rs 421.89 billion respectively.

Likewise, remittances increased 35.6 percent in NPR terms and 29 percent in USD terms. During mid- November to mid-December, remittance inflows stood at Rs 183.18 billion and Rs 870.31 billion in the first five months of the current fiscal year. 

Similarly, the exports increased 58.2 percent and imports increased 15.8 percent during the review period.

According to the central bank, merchandise exports increased 58.2 percent to Rs 116.51 billion compared to a growth of 16.5 percent in the same period of the previous year. Exports to India and other countries increased 82.7 percent and 5.5 percent respectively whereas exports to China decreased 73.3 percent. 

It is said that exports of soyabean oil, cardamom, palm oil, jute goods, and shoes and sandals increased whereas exports of zinc sheet, particle board, tea, woolen carpet and handicraft goods decreased in the review period.

During the review period, mercandise imports increased 15.8 percent to Rs 766.19 billion compared to a growth of 3 percent a year ago. Imports from India, China, and other countries increased 5.7 percent, 24.6 percent, and 40 percent respectively. Imports of crude soyabean oil, chemical fertilizer, gold, transport equipment, vehicle and spare parts, and silver increased whereas imports of hot rolled sheet in coil, garlic, edible oil, oil seeds and pulses products decreased in the review period.

The NRB mentioned that the total trade deficit increased 10.5 percent to Rs 649.68 billion during the first five months of the current fiscal year. 

According to the NRB, the year-on-year consumer price inflation stood at 1.63 percent in mid-December 2025 compared to 6.05 percent a year ago. Food and beverage inflation decreased 2.05 percent whereas non-food and service inflation stood at 3.75 percent in the review month. 

The average inflation stood at 1.55 percent in the fifth month of the current fiscal year compared to 4.89 percent a year ago, the central bank stated. (RSS)