Himal Press 
KATHMANDU: Nepal’s gross foreign exchange reserves increased by 13.8% to Rs.1383.33 billion in mid-February 2023 from Rs.1215.80 billion in mid-July 2022, according to the Nepal Rastra Bank (NRB).
According to the Current Macroeconomic Report of the First Seven Months of 2022/23, in the US dollar terms, the reserves increased by 10.2% to $10.50 billion in mid-February 2023 compared to $9.54 billion in mid-July, 2022. While the reserves held by the NRB increased by 16.2% to Rs 1,228.05 billion, those held by banks and financial institutions decreased by 2.6% to Rs.155.28 billion. The Indian currency accounted for 22.4% of total reserves in mid-February 2023.
The banking sector’s foreign exchange reserves are sufficient to cover merchandise imports for a period of 10.8 months, as well as merchandise and services imports for a period of 9.4 months.
Similarly, balance of payments (BoP) remained at a surplus of Rs.133.21 billion in the review period compared to a deficit of Rs.247.03 billion in the same period of the previous year. In US dollar terms, the BoP remained at a surplus of $1.01 billion in the review period against a deficit of $2.07 billion in the same period of the previous year.
Remittance inflows increased by 27.1% to Rs 689.88 billion in the review period, compared to a decrease of 4.4% in the same period of the previous year. In US dollar terms, remittance inflows increased by 16.4% to $5.30 billion in the review period, compared to a drop of 5.3% in the same period of the previous year.
The banking sector’s foreign exchange reserves are sufficient to cover merchandise imports for a period of 10.8 months, as well as merchandise and services imports for a period of 9.4 months.
The y-o-y consumer price inflation remained at 7.88% in mid-February 2023 compared to 6.24% a year ago. Food and beverage inflation stood at 6.19%, whereas non-food and service inflation rose to 9.22% in the review month. Under the food and beverage category, y-o-y price index of restaurant & hotel sub-category increased 15.24%, cereal grains & their products by 12.39%, tobacco products by 10.83%, alcoholic drinks by 8.78%, and spices by 8.04%.
In the review period, merchandise exports decreased 29% to Rs.93.43 billion against an increase of 88.3% in the same period of the previous year. Destination-wise, exports to India and China fell by 37.7 percent and 13.4 percent, respectively, whereas exports to other countries grew by 8%. Exports of zinc sheet, cardamom, particle board, woolen carpets, polyester yarn & thread, among others, increased whereas exports of soybean oil, palm oil, oil cakes, textiles, silverware and jewelries, among others, fell.
Similarly, merchandise imports also feel by 19.9% to Rs.919.17 billion against an increase of 42.8% a year ago. Destination-wise, imports from India, China and other countries fell by 18%, 24.3%, and 22%, respectively. Imports of petroleum products, sponge iron, chemical fertilizer, gold, other stationeries, among others, increased in the review period, whereas imports of transport equipment & parts, medicine, MS billet, telecommunication equipment and parts, silver, among others, decreased.
