Forex reserves surge 10.2% to Rs 1,696.78 billion

KATHMANDU: Nepal’s gross foreign exchange reserves surged by 10.2%, reaching Rs 1,696.78 billion in mid-November 2023, compared to Rs 1539.36 billion in mid-July 2023. In US dollar terms, the reserves registered an impressive 8.9%, totaling 12.75 billion in mid-November 2023, up from 11.71 billion in mid-July 2023.

According to the Macroeconomic Situation Report for the first four months of the fiscal year 2023/24 released by the Nepal Rastra Bank (NRB) on Thursday, reserves held by the central bank increased to Rs 1,490.83 billion in mid-November, up from Rs 1,345.78 billion in mid-July 2023. Concurrently, reserves held by banks and financial institutions (excluding the central bank) recorded a growth of 6.4%, reaching Rs 205.95 billion in mid-November 2023, compared to Rs 193.59 billion in mid-July 2023.

The share of Indian currency in the total reserves stood at 21.8% percent in mid-November.

Based on the imports over the first four months of 2023/24, the reserves of the banking sector can cover prospective merchandise imports for 13.6 months and merchandise and services imports for 11.3 months. The ratios of reserves-to-GDP, reserves-to-imports, and reserves-to-M2 stood at 31.5%, 94.3%, and 26.7 percent, respectively, in mid-November 2023, reflecting an increase from mid-July 2023 figures of 28.6%, 83%, and 25.1%.

Meanwhile, the current account remained in a surplus of Rs 96.38 billion in the review period, a substantial turnaround from the Rs 37.79 billion deficit recorded in the same period of the previous year. In US Dollar terms, the current account registered a surplus of $725.1 million, compared to a deficit of $296.1 million in the corresponding period last year.

The balance of payments (BoP) also painted a positive picture, maintaining a surplus of Rs.147.11 billion in the review period, up from Rs 20.03 billion in the same period of the previous year. In US Dollar terms, the BoP surplus reached $1.11 billion, a significant increase from $149.6 million in the same period last year.