KAHMANDU- Nepal’s gross foreign currency reserves increased 32.6 percent to Rs 2.041 trillion as of mid-July this year compared to the same period last year.
The report entitled ‘Current Macroeconomic and Financial Situation of Nepal’ unveiled by Nepal Rastra Bank (NRB) on Sunday shows that a total foreign currency worth Rs 502 billion was added in the country’s financial system in the past one year. As of mid-July 2023, the foreign currency reserves stood at Rs 1.539 trillion.
Of the total amount of foreign currency at present, NRB holds Rs 1.848 trillion. The banks and financial institutions have foreign currency worth Rs 192.55 billion with them. Of the total foreign currency reserves, the share of Indian currency stood at 22.5 percent.
In the US dollar terms, the country’s foreign exchange reserves stand at 15.27 billion, an increase by 30.4 percent in the review period. Until last year, the amount was US $11.71 billion.
Based on the imports of 2023/24, the foreign exchange reserve is sufficient to cover the prospective merchandise imports of 15.6 months and merchandise and services imports of 13 months. The ratio of the foreign currency reserves to the country’s gross domestic product reached 35.8 percent, up from 28.8 percent a year ago, show the NRB records.
A major chunk of the foreign currency was contributed by remittance inflows. According to the NRB, Nepal received Rs 1.445 trillion in remittance in the last FY, which was an increase of 16.5 percent during the review period. The rate of remittance inflows last FY was however less compared to 23.2 percent in the FY 2022/23.