Remittance inflows continue to grow, forex reserves swell further

By A Staff Reporter,Kathmandu, Jan. 10: Remittance inflows to Nepal rose by 35.6 per cent to Rs. 870.31 billion in the first five months of the current fiscal year 2025/26, compared with an increase of just 4.7 per cent in the same period of the previous year.

According to the economic status report based on the first-five months of the current Fiscal Year 2025/26 (mid-July to mid-December) published by the Nepal Rastra Bank (NRB) on Friday, remittance inflows amounted to Rs. 183.18 billion, significantly higher than Rs. 118.79 billion recorded in the corresponding in the first five months of this fiscal year.

This year, Nepal received the highest remittance in mid-September to mid-November with the inflows of Rs. 201 billion. 

In the fourth month of this fiscal, the country received Rs. 133.8 billion in remittance, Rs. 201 billion in the third, Rs. 174 billion in the second and Rs. 177 in the first. 

In US dollar terms, remittance inflows increased by 29.0 per cent to USD 6.16 billion during the review period. By comparison, remittance inflows had grown by only 3.4 per cent in dollar terms in the same period of the previous year.

Net secondary income, which mainly comprises remittances and other transfers, reached Rs. 954.78 billion in the review period, up from Rs 700.43 billion a year earlier, read the report.

Meanwhile, the number of Nepali workers seeking foreign employment showed mixed trends. 

A total of 175,591 workers obtained first-time approval for foreign employment during the review period, while 163,924 workers received approval for re-entry. In the same period of the previous year, first-time approvals stood at 190,384, while re-entry approvals were recorded at 135,425.

Forex reserves continue to inflate

Nepal’s gross foreign exchange reserves saw a notable increase of 19.6 per cent, reaching Rs. 3,201.47 billion in mid-December 2025, up from Rs. 2,677.68 billion in mid-July 2025. 

According to the central bank, in US dollar terms, reserves rose by 13.5 per cent to USD 22.13 billion from USD 19.50 billion over the same period.

Of the total reserves, those held by the NRB increased 18.7 per cent to Rs. 2,866.47 billion in mid-December 2025, compared with Rs. 2,414.64 billion in mid-July. 

Meanwhile, reserves held by commercial banks and other financial institutions surged by 27.4 per cent to Rs. 335 billion from Rs. 263.04 billion. The Indian currency accounted for 22.2 per cent of total reserves in mid-December 2025.

According to the central bank, the country’s foreign exchange reserves are sufficient to cover 21.7 months of prospective merchandise imports and 18.2 months of merchandise and services imports, based on figures for the first five months of the 2025/26 

fiscal year.

The reserves-to-GDP ratio stood at 52.4 per cent, up from 43.8 per cent; the reserves-to-imports ratio rose to 151.9 per cent from 128.1 per cent; and the reserves-to-M2 ratio increased to 39.4 per cent from 34.1 per cent.

Inflation remains low

Year-on-year consumer price inflation fell to 1.63 per cent in mid-December 2025, down from 6.05 per cent in the same period last year, indicating a significant easing in price pressures.

Food and beverage inflation declined by 2.05 per cent during the review month (mid-September to mid-December), while inflation in non-food items and services stood at 3.75 per cent. 

Contrarily, during the corresponding period of the previous year 2024/25, prices of food and beverages had surged by 9.99 per cent, and non-food and service prices had risen 

by 3.92 per cent.

A month ago, by mid-November, consumer price inflation stood at 1.11 per cent. It was at 1.68 per cent in the first month of the current fiscal. 

On an average basis, inflation stood at 1.55 per cent in the fifth month of the current fiscal year, a notable decline from 4.89 per cent recorded in the same period last year.

Within the food and beverage category, prices showed mixed trends. The year-on-year price index for ghee and oil rose by 5.52 per cent, followed by non-alcoholic drinks at 3.56 per cent and milk products and eggs at 2.44 per cent. However, prices of vegetables declined sharply by 8.54 per cent, while spices fell by 8.43 per cent and pulses and legumes dropped 

by 5.79 per cent.

During the review month, the year-on-year price index in rural areas increased by 1.09 per cent, while inflation in urban areas was higher at 1.83 per cent.

Province-wise Koshi Province recorded the highest inflation at 2.54 per cent, followed closely by Madhesh at 2.01 per cent.

Provincial Consumer Price Inflation Rate (Five months of 2025/26)

S.N. Province Inflation Rate

1 Koshi 2.54%

2 Madhesh 2.01%

3 Lumbini 1.67%

4 Bagmati 1.48%

5 Karnali 1.09%

6 Gandaki 1.08%

7 Sudurpashchim 0.40%

Source: NRB.