Himal Press 
KATHMANDU: Remittance inflows witnessed a substantial during the first month of the current fiscal year. According to the macroeconomic situation report for the first month of the fiscal year published by the Nepal Rastra Bank (NRB) on Sunday, remittance inflows surged by 25.8% to Rs. 116.02 billion compared to a 20.3% increase in the same period of the previous year.
In US dollar terms, remittance inflows rose by 21.5% to $879.8 million during the review period, in contrast to a 12.5% increase in the same period of the previous fiscal year.
However, despite the positive remittance trend, there was a decrease in the number of Nepali workers seeking approval for foreign employment. The report indicates that the number of Nepali workers obtaining approval for foreign employment dropped by 12.1% to 39,152, while those renewing their approvals decreased by 19.5% to 16,423. Worker approvals for foreign employment had gone up by 75.4% in the same period of the previous year.
The report also highlights a 26.1% in net transfers, reaching Rs. 128.21 billion during the review period, compared to an 18.4% growth in the same period of the previous year.
In terms of the current account and balance of payments, Nepal experienced a surplus of Rs 12.99 billion during the review period, a notable improvement compared to a deficit of Rs 15.13 billion in the same period of the previous year. In US Dollar terms, the current account registered a surplus of $98.5 million compared to a deficit of $118.8 million in the same period last year.
Capital transfers, however, saw a significant decrease of 65.9% amounting to Rs. 272.6 million during the review period, while net foreign direct investment (FDI) remained positive at Rs. 2.65 billion. In the same period last year, capital transfers totaled Rs 800.3 million, and net FDI was negative at Rs 1.40 billion.
Nepal’s balance of payments (BOP) showed a surplus of Rs 32.90 billion during the review period, in stark contrast to a deficit of Rs. 19.76 billion in the same period of the previous year. In US dollar terms, the BOP remained in a surplus of $249.5 million, compared to a deficit of $155.2 million in the same period last year.
Foreign currency reserves up 2.2%
The country’s foreign exchange reserves increased by 2.2% to reach Rs 1,573.12 billion in mid-August 2023, up from Rs 1,539.36 billion in mid-July 2023. In US Dollar terms, the gross foreign exchange reserves rose by 1.2% to $11.85 billion in mid-August, compared to $11.71 billion a month ago.
Of the total foreign exchange reserves, the reserves held by the Nepal Rastra Bank (NRB) increased by 2.9% to Rs. 1,385.24 billion, while reserves held by banks and financial institutions fell by 2.9% to Rs. 187.89 billion. The Indian currency accounted for 21.9% of the total reserves.
Based on the imports of the first month of 2023/24, the foreign exchange reserves of the banking sector can cover the prospective merchandise imports of 12.5 months, and merchandise and services imports of 10.3 months.
