Gross foreign exchange reserves hit 5 -year high of Rs 1967 billion

KATHMANDU, JULY 11 : Nepal’s gross foreign exchange reserves have increased by 27.8 percent to Rs 1967.19 billion in the first 11 months of the current fiscal year. This figure is the highest in five years. During the corresponding period last year, the foreign exchange reserves were Rs 1539.36 billion.

According to the Current Macroeconomic and Financial Situation Report of Nepal unveiled by the NRB yesterday, the gross foreign exchange reserves in terms of the US dollar increased by 25.7 percent to 14.72 billion during the review period.

Of the total foreign exchange reserves, the reserves held by NRB went up by 30.2 percent to Rs 1752.77 billion from mid-July to mid-June of 2023/24. Likewise, reserves held by banks and financial institutions increased by 10.8 percent to Rs 214.42 billion during the review period.

Based on the imports of the first 11 months of 2023/24, the foreign exchange reserves of the banking sector are sufficient to cover the prospective merchandise imports of 15.1 months and merchandise and services imports of 12.6 months.

Regarding the country’s current account, it remained at a surplus of Rs 200.39 billion during the review period. The current account had a deficit of Rs 79.53 billion in the corresponding period of the last fiscal year. In US dollar terms, the current account witnessed a surplus of 1.51 billion during the review period against a deficit of 613.2 million in the same period last year.

From mid-July to mid-June of 2023/24, capital transfer declined by 25.7 percent to Rs 5.46 billion, and net foreign direct investment (FDI) remained positive at Rs 8.16 billion. In the corresponding period of 2022/23, capital transfer had amounted to Rs 7.35 billion, and net FDI to Rs 4.65 billion.

Meanwhile, the Balance of Payments (BOP) remained at a surplus of Rs 425.67 billion in the review period against a surplus of Rs 224.9 billion in the same period of the last fiscal year. In US dollar terms, the BOP remained at a surplus of 3.2 billion during the review period compared to a surplus of 1.71 billion in the same period of the last fiscal year.