Deposits and lending witness rise despite lockdown

Kathmandu, Jul 16

The deposits at banks and financial institutions (BFIs) and credit to private sector have increased despite 3-month long lockdown. However, the growth rate has slumped by a little.

The deposits increased by 13.3 per cent in the 11 months of the last fiscal year 2019/20 compared to the same period of the previous year. The year-on-year basis, the deposits at BFIs expanded by 18.1 per cent in mid-June 2020, according to the Current Macroeconomic and Financial Situation report of the Nepal Rastra Bank (NRB).

The share of demand, saving, and fixed deposits in total deposits stands at 8.7 per cent, 32.2 per cent and 48.2 per cent respectively in mid-June 2020. Such shares were 9.2 per cent, 32.5 per cent and 47.6 per cent respectively a year ago.

Likewise, bank credit to the private sector increased 10.7 per cent in the 11 months compared to a growth of 18.2 percent in the corresponding period of the previous year.

On year-on-year basis, credit to the private sector from BFIs increased by 11.9 per cent in mid-June 2020.

Of the total outstanding credit of the BFIs, 65.5 per cent is against the collateral of land and building and 13.3 per cent against the collateral of current assets (agricultural and non-agricultural products).

According to the central bank, loan of BFIs to agriculture sector increased by 13.1 per cent, industrial production sector increased 11.1 per cent, construction sector increased 11.7 per cent, transportation, communication and public sector increased 16.6 per cent and service industry sector increased 19 per cent in the review period.

 

Exports keep growing

Total trade deficit narrowed down by 16.4 per cent to Rs.1012.81 billion in the eleven months of 2019/20. Such deficit had expanded by 17.2 per cent in the same period of the previous year.

The export-import ratio increased to 8.0 per cent in the review period from 6.8 per cent of the previous year.

In eleven months of 2019/20, merchandise exports increased by 0.2 percent to Rs. 88 billion compared to an increase of 19.4 per cent a year ago.

Exports to India increased by 11.2 per cent whereas exports to China and other countries decreased by 42.1 per cent and 18.3 per cent, respectively.

Exports of palm oil, ayurvedic medicine, herbs, plastic utensils and M.S. pipe increased whereas exports of zinc sheet, wire, polyster yarn and threads, woolen carpet, and readymade garment decreased.

Similarly, merchandise imports decreased by 15.3 per cent to Rs.1100.81 billion against an increase of 17.3 perccent in the same period of the previous year.

Imports from India, China and other countries decreased by 20.3 per cent, 9.0 per cent, and 4.1 per cent, respectively.

Imports of crude palm oil, crude soyabean oil, chemical fertilizer, computer and parts, and edible oil increased whereas imports of gold, M.S. billet, petroleum products, transport equipment and parts, and machinery and parts decreased

 

Remittance decreased

Remittance inflows decreased by 3.0 per cent to Rs. 774.87 billion in the 11 months of the last fiscal against an increase of 17.5 per cent in the same period of the previous year.

In the US Dollar terms, such inflows decreased by 5.1 per cent against an increase of 8.1 per cent of the previous year.

The central bank injected Rs. 219.15 billion liquidity including Rs. 115.87 billion through repo and Rs. 103.28 billion through standing liquidity facility (SLF).

Liquidity of Rs. 287.57 billion was injected including Rs. 141.29 billion through repo and Rs. 146.28 billion through SLF in the corresponding period of the previous year.

Published in The Rising Nepal daily on 17 July 2020.