Nepal received Rs 900.58 billion in remittances during the first seven months of the current fiscal year, according to the latest Nepal Rastra Bank (NRB) report.
The ‘Current Macroeconomic and Financial Situation Report ’, covering the period from mid-July 2024 to mid-February 2025, revealed that remittance inflows grew 7.3% year-on-year, a slower pace compared to the 18.8% increase recorded in the same period last fiscal year.
“In US dollar terms, remittance inflows rose 5.3% to $6.65 billion during the review period, compared to a 16.4% increase in the corresponding period of the previous year,” the report stated.
Nepal continues to experience a large outflow of youth due to a lack of dignified job opportunities at home.
The number of first-time approvals for foreign employment reached 274,622, up from 245,432 in the same period last fiscal year. Similarly, 190,886 Nepali migrant workers renewed their labor permits, a rise from 157,045 in the previous year.
Foreign Exchange Reserves Surge
With domestic economic activities still struggling to pick pace, Nepal’s gross foreign exchange reserves saw a 16.1% increase, reaching Rs 2,369.08 billion in mid-February 2025, up from Rs 2,041.10 billion at the beginning of the fiscal year in mid-July 2024.
“In US dollar terms, gross foreign exchange reserves rose 11.7% to $17.05 billion in mid-February 2025, compared to $15.27 billion in mid-July 2024,” the central bank reported.
Read: Slower Credit Expansion a Concern: Finance Minister Paudel
The Nepal Rastra Bank (NRB), in its monetary policy for the current fiscal year, set a target to increase credit to the private sector from banks and financial institutions (BFIs) by 12.5%. However, private sector credit from BFIs increased Rs 283.46 billion, or 5.6%, in the first seven months, a modest improvement from the 4.1% growth in the corresponding period of last fiscal. On a year-on-year basis, credit to the private sector from BFIs rose 7.3% in mid-February 2025.
Current Account and BOP Remain in Surplus
The current account remained at a surplus of Rs 166.80 billion, slightly up from a surplus of Rs 162.52 billion in the same period last fiscal year.
“Net capital transfer stood at Rs 5.83 billion during the review period, compared to Rs 3.80 billion in the corresponding period of the previous fiscal year,” the report says.
Additionally, foreign direct investment (FDI, equity only) reached Rs 7.45 billion, an increase from Rs 5.19 billion in the first seven months of the last fiscal year.
The Balance of Payments (BOP) also remained at a surplus of Rs 284.41 billion, though slightly lower than the Rs 297.72 billion surplus reported in the same period last fiscal year.
Meanwhile, the reserves-to-GDP ratio increased to 41.5% in mid-February 2025, the report says.
