Remittance inflow up by 16.5pc to Rs 729.02 billion

• CPI-based Inflation remained 3.10 per cent on y-o-y basis.
• Imports increased 13.1 per cent and exports increased 20.2 per cent.
• Remittances increased 16.5 per cent in NPR terms and 13 per cent in USD terms.
• Balance of Payments remained at a surplus of Rs 42.54 billion.
• Gross foreign exchange reserves stood at USD 11.96 billion.

As per the macroeconomic report of the ninth month of the current fiscal year, published by Nepal Rastra Bank (NRB), the central bank, today, said remittance inflows increased by 16.5 per cent to Rs 729.02 billion in the review period against a decrease of 4.2 per cent in the same period of the previous year.

In US dollar terms, remittance inflows increased 13 per cent to $6.19 billion in the review period against a decrease of 4.9 per cent in the same period of the previous year.

Meanwhile, the number of Nepali workers (institutional and individual-new and legalised) taking approval for foreign employment decreased 66.7 per cent in the review period. It had increased 10.2 per cent in the same period of the previous year. The number of Nepali workers (Renew entry) taking approval for foreign employment decreased 55.7 per cent in the review period. It had decreased 15 per cent in the same period of the previous year.

As per the NRB report, the year-on-year consumer price inflation stood at 3.10 per cent in the ninth month of 2020/21 compared to 6.74 per cent a year ago. Food and beverage inflation stood at 3.49 per cent whereas non-food and service inflation stood at 2.79 per cent in the review month.

In the review month, Kathmandu Valley registered inflation of 3.24 per cent compared to 7.19 per cent a year ago. Likewise, Terai, Hill and Mountain regions registered inflation of 2.92 per cent, 3.38 per cent and 1.54 per cent, respectively. These regions had witnessed 7.04 per cent, 5.84 per cent and 4.83 per cent inflation respectively a year ago.

The central bank stated that during the first nine months of 2020/21, merchandise exports increased 20.2 per cent to Rs 94.77 billion compared to an increase of 12.9 per cent in the same period of the previous year. Destination-wise, exports to India and other countries increased 23.5 per cent and 14.5 per cent, respectively whereas exports to China decreased 27.3 per cent.

Meanwhile, merchandise imports increased 13.1 per cent to Rs 1,111.40 billion against a decrease of 7.5 per cent a year ago. Destination-wise, imports from India and China increased by 20.3 per cent and 7.7 per cent, respectively whereas imports from other countries decreased by 2.3 per cent.

The report adds that based on customs points, exports from Dry Port, Kailali, Tatopani, Kanchanpur and Rasuwa Customs Offices decreased whereas exports from all the other customs points increased in the review period. On the import side, imports from all the other customs points increased except Tribhuvan International Airport, Jaleshwor, Tatopani and Rasuwa Customs Offices in the review period.

The NRB has mentioned that total trade deficit increased by 12.5 per cent to Rs 1,016.63 billion in nine months of 2020/21. Such deficit had decreased 8.9 per cent in the same period of the previous year. The export-import ratio increased to 8.5 per cent in the review period from 8 per cent in the same period of the previous year.

Meanwhile, the current account remained at a deficit of Rs 207.41 billion in the review period compared to a deficit of Rs 126.09 billion in the same period of the previous year.

As per the report, in the review period, capital transfer increased 10.7 per cent to Rs 12.86 billion and net foreign direct investment (FDI) decreased 25 per cent to Rs 12.35 billion. In the same period of the previous year, capital transfer and net FDI amounted to Rs 11.62 billion and Rs 16.48 billion, respectively.

In the review period, Balance of Payments (BOP) registered a surplus of Rs 42.54 billion as compared to a surplus of Rs 36.61 billion in the same period of the previous year. Also, gross foreign exchange reserves increased 2.2 per cent to Rs 1,433.27 billion in mid-April 2021 from Rs 1,401.84 billion in mid-July 2020.

Of the total foreign exchange reserves, reserves held by NRB increased 2.2 per cent to Rs 1,253.17 billion in mid-April 2021 from Rs 1,226.12 billion in mid-July 2020. Reserves held by banks and financial institutions (except NRB) increased 2.5 per cent to Rs 180.10 billion in mid-April 2021 from Rs 175.71 billion in mid-July 2020. The share of Indian currency in total reserves stood at 24.4 per cent in mid-April 2021.