The current account of Nepal remained at a surplus of Rs 49.69 billion in the first two months of the current fiscal year compared to a surplus of Rs 23.97 billion in the same period of the previous year, according to the latest report of Nepal Rastra Bank.
The Current Macroeconomic and Financial Situation Report of Nepal unveiled by the central bank on Tuesday, October 15, states that the current account, in terms of the US dollar, registered a surplus of 370.1 million in the review period against a surplus of 181.3 million in the same period last year.
In the review period, net capital transfer amounted to Rs 1.20 billion and foreign direct investment inflow (equity only) remained at Rs 2.71 billion, the NRB report added. In the same period of the previous year, net capital transfer had amounted to Rs 850.8 million and foreign direct investment inflows (equity only) amounted to Rs 3.0 billion.
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Similarly, the Balance of Payments (BOP) remained at a surplus of Rs 101.77 billion in the review period compared to a surplus of Rs 55.1 billion in the same period of the previous year.
In the US Dollar terms, the BOP remained at a surplus of 757.9 million in the review period compared to a surplus of 417 million in the same period of the previous year.
The central bank’s report further mentions that the gross foreign exchange reserves increased 5.5 percent to Rs 2,152.53 billion in mid-September 2024 from Rs 2,041.10 billion in mid-July 2024.
In US dollar terms, the gross foreign exchange reserves increased 5 percent to 16.04 billion in mid-September 2024 from 15.27 billion in mid-July 2024.
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Of the total, reserves held by NRB increased 4.4 percent to Rs 1,928.99 billion in mid-September 2024 from Rs 1,848.55 billion in mid-July 2024.
Similarly, the reserves held by banks and financial institutions (except NRB) increased 16.1 percent to Rs 223.53 billion in mid-September 2024 from Rs 192.55 billion in mid-July 2024.
Likewise, the share of Indian currency in total reserves stood at 22.1 percent in mid-September 2024.
Based on the imports of two months of the current fiscal year, the foreign exchange reserves of the banking sector is sufficient to cover the prospective merchandise imports of 16.8 months, and merchandise and services imports of 13.7 months.
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The ratio of reserves-to-GDP, reserves-to-imports and reserves-to-M2 stood at 37.7 percent, 114.4 percent and 30.8 percent, respectively in the review period. Such ratios were 35.8 percent, 108.6 percent and 29.3 percent, respectively, in mid-July 2024, the central bank said.