Remittances rise by 4.4% to Rs 640.43 billion in five months

KATHMANDU: Remittance inflows increased by 4.4% to reach Rs 640.43 billion over the first five months of fiscal year 2024/25.

According to the Current Macroeconomic Situation Report released by the Nepal Rastra Bank (NRB), this is a slower growth compared to 24.2% in the same period of the previous fiscal year.

In US dollar terms, remittances increased by 2.5% to 4.73 billion, down from 21.1% growth in the previous fiscal year. The number of Nepali workers seeking first-time approval foreign employment approvals grew to 190,384, a 10.7% increase from 171,975 in the same period of the previous fiscal year. Similarly, renewals for foreign employment approvals climbed by 32% to 135,425.

According to the report, current account recorded a surplus of Rs 140.71 billion, marginally lower than the Rs 141.03 billion surplus in the corresponding period of the previous fiscal year. In US dollar terms, the surplus stood at $1.04 billion, slightly below last year’s $1.06 billion.

Similarly, net capital transfers increased to Rs 3.50 billion, while foreign direct investment (FDI) inflows grew significantly, reaching Rs 6.03 billion compared to Rs 3.93 billion in the same period last year.

BoP situation strengthens

The Balance of Payments (BoP) registered a surplus of Rs 225.34 billion, a 4.3% increase from last year’s Rs 216.05
According to the report, such surplus, in US dollar terms, stood at $1.67 billion, up from $1.63 billion in the previous year.

Foreign exchange reserves surge by 11.4%

Gross foreign exchange reserves surged by Rs 2,273.26 billion in mid-December 2024, up from Rs 2041.10 billion in mid-July 2024. In US dollar terms, the reserves expanded by 9.7% to $16.76 billion.
According to the report, reserves held by the central bank increased by 10%, while those held by other banks and financial institutions jumped by 24.6%. Indian currency constituted 22.8% of the total reserves.

The current foreign exchange reserves are sufficient to cover 17.6 months of merchandise imports and 14.6 months of combined merchandise and services imports, according to the report.