Monthly remittance soars to Rs.116.02 billion
Kathmandu, Sept. 17
Record inflow of remittance and reduction in imports of
goods owing to the decrease in demands has ushered the economy into a
comfortable zone in terms of external sector management.
Due to depleting foreign currency reserves owing to the
massive growth in imports of goods including luxury items like cars and liquors
the external sector pressure had 'significantly increased' in the aftermath of
the COVID-19 pandemic that the experts had feared the country could experience
the 'Sri Lankan fate'. Sri Lanka had then run out of foreign currency reserves
and had failed even to service its loans.
But remittance inflows in the first month of the current
Fiscal Year 2023/24 (mid-July to mid-August 2023) have increased by 25.8 per
cent to Rs.116.02 billion compared to an increase of 20.3 per cent in the same
period of the previous year, according to a monthly report published by the
Nepal Rastra Bank (NRB) on Sunday. Last year, remittance inflow in the first
month stood at Rs. 92.21 billion.
Shrawan (mid-July to mid-August) is the ninth month that
continuously witnessed the inflow of more than Rs. 100 billion remittance
inflow.
In the US Dollar terms, remittance inflows increased 21.5
per cent to 879.8 million in the first month while it had seen an increase of
12.5 per cent in the same period last year. Inflation of Nepali rupee against
the US dollars had also caused the highest growth in the remittance inflow in
any months since the country began to receive it.
Net transfer up by 26.1
Net transfer to Nepal increased by 26.1 per cent to
Rs.128.21 billion in the first month against the growth of 18.4 per cent in the
same period last year.
The growth in the influx of remittance is also by the
increased number of Nepali workers to foreign countries.
Number of Nepali workers (institutional and individual-new)
taking approval for foreign employment had increased by 75.4 per cent in the
first month of the last fiscal.
It has been decreased by 12.1 per cent to 39,152 in the
review period. The number of Nepali workers (Renew entry) taking approval for
foreign employment decreased 19.5 per cent to 16423 in the review period.
Likewise, decreased demands in the domestic market had
checked the imports. During the first month of 2023/24, merchandise imports
decreased by 1.6 per cent to Rs.129.24 billion compared to a decrease of 12.9
per cent a year ago.
Foreign currency reserves cross Rs. 1573 bn
Meanwhile, the foreign currency reserves have reached Rs.
1573.12 billion by mid-August with an increase of Rs. 34 billion from the
previous month. Although the government and the NRB have lifted the control
measures in imports and foreign trips, reserves have taken an upward trend.
According to the central bank, the current foreign currency reserves are
sufficient to cover the imports of goods for 12.5 months and imports of goods
and services for 10.3 months.
Likewise, the current account has remained at a surplus of
Rs.12.99 billion in the review period against a deficit of Rs.15.13 billion in
the same period of the previous year. This has happened after about 33 months
since the current account was in deficit since mid-November 2020.
In the US Dollar terms, the current account registered a
surplus of 98.5 million in the review period against a deficit of 118.8 million
in the same period last year.
Inflation, still poses challenge
Consumer price inflation is still high although it has
significantly come down to 7.52 per cent by mid-August this year from 8.26 per
cent a year ago.
According to the NRB, food and beverage inflation stood at
8.95 per cent whereas non-food and service inflation stood at 6.42 percent in
the review month.
Under the food and beverage category, year on year price
index of spices sub-category increased by 45.56 per cent, cereal grains and
their products by 13.20 per cent, milk products and eggs by 12.19 per cent,
restaurant and hotel by 11.05 per cent and vegetable by 10.80 per cent.
But price index of ghee and oil sub-category decreased by
15.13 per cent.
Similarly, under the non-food and services category, year on
year price index of recreation and culture sub-category increased by 15.55 per cent,
education by 9.10 per cent, housing and utilities by 6.93 per cent and
furnishing and household equipment by 6.79 per cent.
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