Gross Foreign Exchange reserve decreases by 16.2 percent


March 11, 2022


Gross Foreign Exchange reserve decreases by 16.2 percent

KATHMANDU: Gross foreign exchange reserve has decreased by 16.2 percent.

According to the report based on Seven Months’ Data Ending Mid-February of the fiscal year 2021/22 published by Nepal Rastra Bank, the foreign reserve fell to Rs.1173.02 billion in mid-February 2022 from Rs.1399.03 billion in mid-July 2021.

In US Dollar terms, the gross foreign exchange reserves decreased 17.0 percent to 9.75 billion in mid-February 2022 from 11.75 billion in mid-July 2021.

Of the total foreign exchange reserves, reserves held by NRB decreased 17.7 percent to Rs.1024.60 billion in mid-February 2022 from Rs.1244.63 billion in mid-July 2021.

Reserves held by banks and financial institutions (except NRB) decreased 3.9 percent to Rs.148.42 billion in
mid-February 2022 from Rs.154.39 billion in mid-July 2021.

The share of Indian currency in total reserves stood at 24.2 percent in mid-February 2022.

Similarly, based on the imports of seven months of 2021/22, the foreign exchange reserves of the banking sector
is sufficient to cover the prospective merchandise imports of 7.4 months, and merchandise and services
imports of 6.7 months.

The ratio of reserves-to-GDP (previous fiscal year), reserves-to-imports, and reserves-to-M2 stood at 27.5 percent, 55.8 percent, and 22.1 percent respectively in mid-February 2022. Such ratios were 32.8 percent, 84.7 percent, and 27.1 percent respectively in mid-July 2021.

Nepali currency vis-à-vis the US Dollar depreciated 1.06 percent in mid-February 2022 from mid-July 2021. It had appreciated 3.53 percent in the same period of the previous year. The buying exchange rate per US Dollar stood at Rs.120.32 in mid-February 2022 compared to Rs.119.04 in mid-July 2021.