External Sector Strengthens: Increase in Remittances and Foreign Exchange Reserves
Kathmandu – Nepal’s external sector has shown resilience in the first seven months of the current fiscal year, with a surge in remittance inflows and foreign exchange reserves reaching record levels. According to the latest economic and financial status report released by Nepal Rastra Bank (NRB), the country’s current account and balance of payments have also remained in surplus.
In the past seven months, Nepal received NPR 900 billion in remittances, marking a 7.3% increase, bringing the total remittance inflow to NPR 900.58 billion. During this period, 274,622 Nepali workers received final labor approval for foreign employment, while 190,886 workers renewed their approvals for re-employment abroad.
Current Account and Balance of Payments in Surplus
The current account recorded a surplus of NPR 166.80 billion in the first seven months of this fiscal year, compared to a surplus of NPR 162.52 billion in the same period last year. Similarly, Nepal attracted NPR 7.45 billion in Foreign Direct Investment (FDI) during this period.
As of mid-January, Nepal’s balance of payments stood at NPR 284.41 billion in surplus, though slightly lower than last year’s NPR 297.72 billion.
Foreign Exchange Reserves Reach Record High
Total foreign exchange reserves, which stood at NPR 2.04 trillion at the end of the last fiscal year, have grown by 16.1% in the past seven months, reaching NPR 2.37 trillion.
- NRB’s forex reserves: Increased by 13.9% to NPR 2.10 trillion
- Bank and financial institutions’ forex reserves: Increased by 37.1% to NPR 263.93 billion
Foreign Reserves Can Sustain Imports for Over a Year
Based on the current import levels, NRB estimates that the existing foreign exchange reserves can sustain:
- 17.2 months of goods imports
- 14.4 months of both goods and services imports
The rising remittance inflows and improved foreign exchange reserves have strengthened Nepal’s external financial position, providing economic stability amid global uncertainties.