Current account surplus hits Rs 210 billion; forex reserves surge 19 percent

KATHMANDU, MARCH 26: The current account recorded a surplus of Rs 210.22 billion in the first nine months of the fiscal year 2024/25, up from a surplus of Rs 179.83 billion in the same period last year. In US dollar terms, the current account surplus stood at 1.55 billion during the review period, compared to 1.35 billion in the corresponding period last year.

This information was reported by the Nepal Rastra Bank (NRB) in its Review of the Monetary Policy for the current fiscal year 2024/25.

The Balance of Payments (BoP) showed a surplus of Rs 346.23 billion during the review period, slightly lower than the Rs 365.16 billion surplus recorded during the same period last year. In US dollar terms, the BOP surplus was 2.55 billion compared to 2.75 billion recorded in the last year’s corresponding period.

According to the NRB, net capital transfers amounted to Rs 7.71 billionn, up from Rs 4.78 billion in the same period last year. Additionally, foreign direct investment (equity only) inflows reached Rs 8.96 billion, compared to Rs 6.49 billion in the last’s corresponding period.

Foreign Exchange Reserves

Gross foreign exchange reserves increased by 18.9 percent to Rs 2,426.84 billion as of mid-April 2025, up from Rs 2,041.10 billion in mid-July 2024. In US dollar terms, reserves rose by 15.4 percent to 17.63 billion from 15.27 billion.

Of the total reserves, the NRB held Rs 2,136.46 billion during the review period, marking a 15.6 percent increase from Rs 1,848.55 billion in mid-July 2024. Meanwhile, reserves held by banks and financial institutions (excluding NRB) surged by 50.8 percent to Rs 290.38 billion, up from Rs 192.55 billion.

Indian currency accounted for 20.4 percent of the total foreign exchange reserves as of mid-April 2025.

Foreign exchange adequacy indicators

Based on imports during the first nine months of 2024/25, the banking sector’s foreign exchange reserves are sufficient to cover prospective merchandise imports for 17.1 months and combined merchandise and services imports for 14.2 months.

The ratios of reserves to GDP, reserves to imports, and reserves to M2 stood at 39.7 percent, 118.7 percent, and 32.8 percent, respectively, as of mid-April 2025. These ratios were 35.8 percent, 108.6 percent, and 29.3 percent, respectively, in mid-July 2024.