KATHMANDU: Nepal’s remittance inflow has continued to grow strongly in the current fiscal year, rising by 39.8 percent by mid-February, according to the latest data released by Nepal Rastra Bank.
The central bank’s seven-month financial report shows that remittance inflow reached Rs 1.261 trillion by mid-February of the current fiscal year. In the same period last fiscal year, remittance had increased by only 7.5 percent.
Monthly inflow also saw a slight rise. Remittance worth Rs 192 billion had entered the country in the month of Poush (mid-Jan), which increased to around Rs 198 billion by mid-February. In the same month last fiscal year, the country had received Rs 137.5 billion in remittances.
In terms of US dollars, remittance inflow grew by 33 percent, reaching 8.86 billion dollars by mid-February, compared to a growth of 5.5 percent during the same period last fiscal year.
The central bank report also shows a significant increase in net secondary income (net transfers), which reached Rs 1.384 trillion during the review period, up from Rs 986.34 billion recorded in the corresponding period of the previous fiscal year.
Foreign exchange reserves cross Rs 3.3 trillion
Nepal’s foreign exchange reserves have also witnessed notable growth, surpassing Rs 3.3 trillion within the first seven months of the current fiscal year.
The reserves, which stood at Rs 2.677 trillion at the end of the last fiscal year in mid-July, increased by 23.3 percent to reach Rs 3.302 trillion by mid-February, according to the central bank.
In US dollar terms, foreign exchange reserves grew by 16.7 percent to reach 22.76 billion dollars during the same period.
Of the total reserves, Rs 2.926 trillion is held by Nepal Rastra Bank, while Rs 375.67 billion is held by banks and financial institutions other than the central bank.
The share of Indian currency in the total foreign exchange reserves currently stands at 21.5 percent.
Based on current import levels, the available reserves are sufficient to finance merchandise imports for 21.3 months and goods and services imports for 18 months, the report noted.
Balance of payments remains strong
Nepal’s balance of payments (BoP) has also recorded a significant surplus during the review period, supported largely by rising remittance inflows and improvements in the current account.
According to Nepal Rastra Bank, the balance of payments surplus reached Rs 572.73 billion in the first seven months of the current fiscal year, compared to Rs 284.41 billion during the same period last year.
Similarly, the current account surplus stood at Rs 493.78 billion by mid-February. In the same period last fiscal year, the current account surplus had stood at Rs 184.14 billion.
In US dollar terms, the current account surplus increased to 3.47 billion dollars, compared to 1.37 billion dollars during the same period of the previous fiscal year.
Net capital transfer also rose to Rs 11.43 billion during the review period, up from Rs 5.83 billion recorded a year earlier.
Foreign employment approvals decline
Despite the surge in remittance inflows, the number of Nepalis receiving final approval for foreign employment has declined compared to last year.
By mid-February, 245,153 Nepalis had received final labor approval for foreign employment, while 227,424 workers obtained re-entry approvals.
In the same period last fiscal year, the number of workers receiving final labor approval had reached 274,622, while 190,886 had obtained re-entry approvals.
Meanwhile, foreign direct investment (FDI) in equity reached Rs 10.22 billion in Magh, up from Rs 7.43 billion recorded in the same period last fiscal year, the central bank added.
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