Nepal received Rs 640.43 billion in remittances during the first five months of the current fiscal year, according to the latest data from Nepal Rastra Bank.
The Current Macroeconomic and Financial Situation Report, based on data from mid-July to mid-December 2024, indicates that remittance inflows grew by 4.4% during the review period, a slower pace compared to the 24.2% growth recorded in the same period last year.
“In US Dollar terms, remittance inflows increased by 2.5% to $4.73 billion, compared to a 21.1% rise in the same period of the previous fiscal year,” the report noted.
The number of Nepali workers seeking first-time approval for foreign employment stood at 190,384, up from 171,975 in the same period last fiscal year. Similarly, 135,425 Nepali migrant workers renewed their labor permits, compared to 102,542 in the same period last year.
Foreign Exchange Reserves Surge
Amid rising remittances and reduced domestic economic activity, gross foreign exchange reserves rose by 11.4% to Rs 2,273.26 billion in mid-December 2024 from Rs 2,041.10 billion in mid-July 2024.
“In US Dollar terms, the gross foreign exchange reserves increased by 9.7% to $16.76 billion in mid-December 2024, compared to $15.27 billion in mid-July 2024,” the central bank reported.
Based on the import trend for the first five months, the reserves are sufficient to cover prospective merchandise imports for 17.6 months and merchandise and services imports for 14.6 months.
Current Account and BOP Surplus
The current account recorded a surplus of Rs 140.71 billion during the review period, slightly down from Rs 141.03 billion in the same period last fiscal year.
“Net capital transfer amounted to Rs 3.50 billion during the review period, compared to Rs 2.87 billion in the corresponding period of the previous fiscal year,” the report stated.
Additionally, Nepal received Rs 6.03 billion in foreign direct investment (FDI, equity only) during the review period, up from Rs 3.93 billion in the first five months of the previous year.
The Balance of Payments (BOP) remained in surplus at Rs 225.34 billion, compared to a surplus of Rs 216.05 billion during the same period last fiscal year.
The reserves-to-GDP ratio increased to 39.8% in mid-December 2024, up from 35.8% in mid-July 2024. Similarly, the reserves-to-imports ratio rose to 121.6% from 108.6% during the same period.
