Current account remains at surplus of over Rs 284 billion

KATHMANDU, MARCH 13:  Nepal Rastra Bank (NRB) reported that the current account surplus stood at Rs.166.80 billion in the first seven months of the current fiscal, up from Rs.162.52 billion in the same period last year, as per its Current Macroeconomic and Financial Situation of Nepal (Based on Seven Months Data Ending Mid-February, 2024/25) Report.

In US dollar terms, the current account registered a surplus of 1.24 billion, compared to 1.22 billion in the same period last year.

During the review period, net capital transfer amounted to Rs.5.83 billion, up from Rs.3.80 billion compared to the same period last year. Foreign direct investment (FDI) inflow (equity only) reached Rs.7.45 billion, a rise of Rs.5.19 billion.

The balance of payments (BoP) recorded a surplus of Rs.284.41 billion from Shrawan (mid-July to mid-August) to Falgun (mid-February to mid-March), slightly lower than Rs.297.72 billion compared to the corresponding period last year).  In US dollar terms, the BoP surplus stood at 2.11 billion, down from 2.24 billion last year.

Gross foreign exchange reserves increased by 16.1 percent to Rs.2,369.08 billion in mid-February 2025 from Rs.2,041.10 billion in mid-July 2024. In US dollar terms, reserves rose by 11.7 percent to 17.05 billion from 15.27 billion over the same period.

Of the total reserves, those held by NRB grew by 13.9 percent to Rs.2,105.14 billion, while reserves held by banks and financial institutions (excluding NRB) surged by 37.1 percent to Rs.263.93 billion. The share of Indian currency in total reserves stood at 22.0 percent as of mid-February 2025.

Based on imports for the first seven months of 2024/25, the banking sector’s foreign exchange reserves are sufficient to cover 17.2 months of merchandise imports and 14.4 months of combined merchandise and service imports.

The reserves-to-GDP ratio stood at 41.5 percent in mid-February 2025, up from 35.8 percent in mid-July 2024. The reserves-to-imports ratio increased from 108.6 percent to 120.3 percent, while the reserves-to-M2 ratio rose from 29.3 percent to 32.5 percent over the same period.