Forex reserves decline 18 percent in 10 months of running fiscal

KATHMANDU: Gross foreign exchange reserves in the country decreased 18 percent in the first 10 months of fiscal year 2021/22.

According to macroeconomic and financial report released on Friday by Nepal Rastra Bank (NRB), foreign reserves declined to Rs 1,146.88 billion in mid-May 2022 from Rs 1,399.03 billion in mid-July 2021. This is a decrease of 18 percent.

In the US dollar terms, the gross foreign exchange reserves decreased 21.1 percent to 9.28 billion in mid-May 2022 from 11.75 billion in mid-July 2021.

Of the total foreign exchange reserves, reserves held by NRB decreased 18.3 percent to Rs.1017.27 billion in mid-May 2022 from Rs 1244.63 billion in mid-July 2021.

Likewise, reserves held by banks and financial institutions (except NRB) decreased 16.1 percent to Rs 129.61 billion in mid-May 2022 from Rs 154.39 billion in mid-July 2021.

The share of Indian currency in total reserves stood at 25.1 percent in mid-May 2022.

Based on the imports of ten months of 2021/22, the foreign exchange reserves of the banking sector is sufficient to cover the prospective merchandise imports of 7.34 months, and merchandise and services imports of 6.57 months.