Forex reserve increase
Nepal’s foreign currency reserves increased in the first seven months of the current fiscal year mainly due to the rise in the remittance earnings and cutbacks on luxury import items.
Foreign labour permits increased by 57.3%, increasing remittance earnings by 27.1% to Rs689.88 billion against a drop of 4.4% in the same period last year. Nepal Rastra Bank (NRB) reports that the country’s gross foreign exchange reserve grew to $10.50billion in mid-February 2023 from $9.54 billion in mid-June 2022. Reserves held by banks and financial institutions except NRB decreased 2.5% to Rs155.28 billion. Merchandise imports decreased 19.9% to Rs919.16 billion and imports from India, China and other countries dropped by 18%, 24.3% and 22% respectively. FDI remained at Rs1.04 billion in the review period. The current account deficit is still Rs29.64 billion.