Nepal breaks record with all-time high foreign currency reserves of US $13.31 bn

KATHMANDU: In a remarkable economic achievement, Nepal has achieved a historic milestone by reaching an unprecedented foreign currency reserve of US $13.31 billion, showcasing a significant surge driven primarily by an astonishing increase in remittance inflows over the past few months.

 Nepal Rastra Bank Report Highlights Remarkable Growth

The latest report from the Nepal Rastra Bank (NRB) on the ‘Current Macroeconomic and Financial Situation of Nepal’ reveals a staggering 13.6 percent surge in foreign currency reserves within the past five months of the current fiscal year. The landlocked nation received a net influx of foreign currencies amounting to USD 1.6 billion during this period.

Nepali Currency Shows Resilience and Growth

Measured in Nepali currency, the country’s total foreign currency reserves reached Rs 1.767 trillion as of mid-December, a notable increase from Rs 1.539 trillion in mid-July. The data also indicates a remarkable growth of Rs 122 billion in just the past month.

 Remittance Inflows Skyrocket

Economists attribute the surge in foreign currency reserves to a remarkable 27.6 percent increase in remittance inflows, reaching Rs 613.25 billion during the review period. In US Dollar terms, remittance inflows saw a substantial 24.5 percent rise, reaching $4.62 billion, compared to a 13.1 percent increase in the same period last year.

 Positive Impact on Current Account and Balance of Payments

The surge in net transfer and a decline in imports by 3.4 percent to Rs 642.21 billion contributed to a surplus in the country’s current account, reaching Rs 140.23 billion during the review period. This is a significant turnaround from the Rs 41.21 billion deficit recorded in the same period last year.

Similarly, the balance of payments (BoP) reflected a surplus of Rs 210.59 billion, a substantial increase from the Rs 45.87 billion surplus in the previous year’s review period. In US Dollar terms, the BoP surplus stood at $1.58 billion compared to $346.8 million last year.