Remittances flow rises by 22.7% to Rs 1,112.52 billion

KATHMANDU: Nepal experienced a notable increase in remittance inflows, with a growth of 22.7%, amounting to Rs 1,112.52 billion in the first 11 months of the current fiscal year.

According to the Current Macroecnomic Situation Report (for the 11 months of the fiscal year 2022/23) published by the Nepal Rastra Bank (NRB) on Monday, this increase surpasses the 4.1% growth recorded in the same period of the previous year.

In US dollar terms, remittance inflows increased by 13% percent, reaching 8.51 billion, compared to a 1.8% increase in the period of the previous fiscal year.

The number of Nepali workers seeking approval for foreign employment witnessed a significant rise during the period. The data shows a 46.6% increase in the number of new approval, totaling 459,415 in the review period. Additionally, the number of workers renewing their foreign employment approval increased by 0.5% to 260,262.

The net transfer, which includes remittances and other financial inflows, increased by 21.9%, amounting to Rs 1,229.82 billion in the review period. This growth surpasses the 3.8% increase recorded in the same period of the previous year.

Nepal achieved a balance of payments (BOP) surplus of Rs 228.98 billion in the review period, a significant improvement compared to the deficit of Rs 269.81 billion in the same period of the previous year.

In terms of the current account, Nepal witnessed a deficit of Rs 69.40 billion during the review period, a significant improvement compared to the deficit of Rs 592.14 billion in the same period of the previous year. The deficit in US dollar terms stood at 536.1 million, compared to a deficit of 4.93 billion in the previous year.

Nepal achieved a balance of payments (BOP) surplus of Rs 228.98 billion in the review period, a significant improvement compared to the deficit of Rs 269.81 billion in the same period of the previous year. In US dollar terms, the BOP recorded a surplus of 1.74 billion, compared to a deficit of 2.26 billion in the previous year.

The foreign exchange reserves of Nepal also recorded positive growth, with gross reserves increasing by 21.8% to Rs 1,480.87 billion in mid-June 2023. In US dollar terms, gross foreign exchange reserves increased by 18.5%, totaling 11.30 billion.

Based on import data from the eleven months of 2022/23, the foreign exchange reserves of the banking sector can cover prospective merchandise imports for 11.2 months and merchandise and services imports for 9.6 months.