By Our Reporter
At a time when the gap between government revenue and expenditure is widening, a significant improvement has been noticed in the external sector of the economy during the first six months of the current fiscal year 2023/24.
Improvement has been seen in foreign currency reserves, balance of payments, current account and remittance inflows until mid-January of the current fiscal year, according to the current macroeconomic and financial status report published by the Nepal Rastra Bank (NRB) Tuesday. NRB said The foreign currency reserves reached an all-time high of Rs. 1,816.57 billion during the first half of the current fiscal year, and it would be enough to support the import of goods and services for one year.
Foreign currency reserves added about Rs. 49 billion during a single month (mid-December 2023 to mid-January 2024). The foreign currency reserves were Rs. 1,767.04 billion in mid-December 2023.
According to NRB, the gross foreign exchange reserves increased by 18 per cent to Rs. 1816.57 billion in mid-January 2024 from Rs. 1539.36 billion in mid-July 2023.
Of the total foreign exchange reserves, the reserves held by NRB increased by 18.9 per cent to Rs. 1600.23 billion in mid-January 2024 from Rs. 1345.78 billion in mid-July 2023.
Reserves held by banks and financial institutions (except NRB) increased by 11.8 per cent to Rs. 216.35 billion in mid-January 2024 from Rs. 193.59 billion in mid-July 2023.
The share of Indian currency in total reserves stood at 22.5 per cent in mid-January 2024.
Based on the imports of six months of 2023/24, the foreign exchange reserves of the banking sector are sufficient to cover the prospective merchandise imports of 14.1 months and merchandise and services imports of 12.1 months, said the NRB.
According to the report, remittance inflows increased by 25.3 per cent to Rs. 733.22 billion in the review period compared to an increase of 24.3 per cent in the same period of the previous year.
The report showed that a remittance of Rs. 120 billion has been received in a single month from mid-December 2023 to mid-January 2024 of the current fiscal year.
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