Remittances up by 24.3% to Rs 585.08 billion in six months

KATHMANDU: Remittance inflows increased by 24.3% to Rs 585.08 billion in the first six months of the current fiscal year, against a decline of 5% in the same period of the previous year.

In US Dollar terms, remittance inflows improved by 13.9% to 4.50 billion over the first six months of the current fiscal year compared to a drop of 5.7% in the same period of the previous year.

Inflation moderates
The y-o-y consumer price inflation moderated to 7.26% in the sixth month of the fiscal year i.e mid-Dec to mid-Jan compared to 7.38% in a month ago. The inflation is still higher compared to 5.65% in the same period of the previous fiscal year.

Under the non-food and services category, year-on-year consumer price index of transportation sub-category increased by 16.43%, health by 11.22%, recreation & culture by 8.76%, miscellaneous goods & services by 8.68%, and furnishing & household equipment 8.33%.

In the review month, consumer price inflation in the Kathmandu Valley, Terai, Hill and Mountain surged to 6.93%, 7.49%, 7.30% and 6.69%, respectively.

Exports down 32%
During the six months of 2022/23, merchandise exports fell by 32% to Rs.80.81 billion against an increase of 95.5% in the same period of the previous year. Exports to India and China decreased by 40.1% and 25.2%, respectively, whereas exports to other countries increased by 3.6%.
Similarly, merchandise imports fell by 20.7% to Rs 792.67 billion in the review period against an increase of 51.1% a year ago. Imports from India, China and other countries fell by 19.4%, 24.6%, and 21.4%, respectively.

Forex reserves improve
Gross foreign exchange reserves increased by 10% to Rs 1,337.29 billion in mid-January, up from Rs 1,215.80 billion in mid-July 2022.

In US dollar terms, the gross foreign exchange reserves increased by 8% to 10.30 billion in mid-January from 9.54 billion in mid-July 2022.

Of the total foreign exchange reserves, reserves held by NRB increased 12% to Rs 1,183.37 billion in mid-January, up from Rs 1,056.39 billion in mid-July 2022.

Based on the imports of the first six months of 2022/23, the foreign exchange reserves of the banking sector is sufficient to cover the prospective merchandise imports of 10.4 months, and merchandise and services imports of 9.1 months.