Remittance rises by 16.5% to Rs 1.45 trillion

KATHMANDU: Remittance inflows increased by 16.5% to Rs 1,445.32 billion during fiscal year 2023/24. Remittances had risen by 23.2% in the 2022/23.

According to the Current Macroeconomic Situation Report for Fiscal Year 2023/24 published by the Nepal Rastra Bank (NRB) on Sunday, remittances in US dollar terms surged by 14.5% to 10.86 billion.

A total of 460,103 Nepali youths took labor approval to work in foreign destinations during the year, down from 497,704 in 2022/23.

The remittance growth contributed to a positive shift in the country’s current account which registered a surplus of Rs 221.34 billion ($1.66 billion). The current account was at a deficit of Rs 46.57 billion in 2022/23. In US dollar terms, the current account registered a surplus of 1.66 billion in 2023/24 compared to a deficit of 360.6 million in 2022/23.

The Balance of Payments (BOP) painted an even more optimistic picture with a substantial surplus of Rs 502.49 billion ($3.77 billion), nearly double compared to the previous fiscal year.

The foreign currency reserves expanded by 32.6% to reach Rs 2041.10 billion in mid-July, up from Rs 1,539.36 billion in mid-July last year. In US dollar terms, such reserves expanded by 20.5% to 15.27 billion in 2023/24. The foreign currency reserves can finance merchandise imports of 15.6 months, and merchandise and services imports of 13 months, according to the report.

Of the total foreign exchange reserves, reserves held by NRB increased 37.4% to Rs 1848.55 billion in mid-July 2024 from Rs 1,345.78 billion in mid-July 2023. Reserves held by banks and financial institutions (except NRB) contracted by 0.5% to Rs. 192.55 billion in mid-July from Rs 193.59 billion in mid-July last year.