KATHMANDU, Sept 20: Nepal’s foreign exchange reserves rose to Rs 3.946 trillion in mid-August, giving the country enough funds to pay for 21.8 months of merchandise imports, according to Nepal Rastra Bank (NRB).
The reserves grew 1.2 per cent from Rs 3.898 trillion in mid-July. Measured in US dollars, they rose 2.1 per cent to $25.84 billion. The central bank said the reserves could also cover 18.8 months of imports when services are included.
Money sent home by Nepalis working abroad helped drive the increase. Remittance inflows reached Rs 215.05 billion in the review month, up 21.2 per cent from a year earlier. The current account recorded a surplus of Rs 94.59 billion, compared with Rs 78.29 billion in the same month last year. The overall balance of payments was also in surplus, at Rs 90.34 billion.
The reserve figures give Nepal a substantial cushion for paying overseas suppliers. They also show how strongly that cushion depends on money earned abroad, while the country continues to buy far more goods than it sells.
Merchandise imports jumped 31 per cent to Rs 187.44 billion. Exports grew faster, rising 61.7 per cent to Rs 38.70 billion, but started from a much smaller base. As a result, the trade deficit widened 24.9 per cent to Rs 148.74 billion. Net services income was also in deficit, at Rs 10.82 billion.
For now, remittances are more than offsetting the pressure from imports and helping build reserves. The contrast remains clear in NRB’s figures: Nepal has ample foreign currency to pay its import bills, but its trade gap is still growing.
People’s News Monitoring Service
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