Wednesday, July 9, 2025

Remittance inflow sees robust increase in FY's 1st 11 months

 Kathmandu, July 8

Nepal witnessed a robust increase in remittance inflows during the first 11 months of the current fiscal year 2024/25 with a year-on-year rise of 15.5 per cent.

According to the latest report published by the Nepal Rastra Bank (NRB) on Tuesday, remittance inflows rose by 15.5 per cent to Rs. 1,532.93 billion, compared to a 17.2 per cent growth in the corresponding period of the previous year.

The report posted a largely positive economic outlook of the country.

In US dollar terms, inflows amounted to USD 11.25 billion, marking a 12.7 per cent rise. The monthly inflow for mid-May to mid-June stood at Rs. 176.32 billion, significantly higher than the Rs. 128.91 billion recorded in the same month last year.

The number of Nepalis taking first-time approvals for foreign employment reached 452,324, with an additional 308,067 receiving approvals for re-entry. Net secondary income, comprising remittance and other transfers, reached Rs. 1,668.30 billion, up from Rs.1,443.10 billion a year ago.

Meanwhile, consumer price inflation moderated notably. Y-o-y inflation stood at 2.72 per cent in mid-June 2025, down from 4.17 per cent a year earlier. Inflation in food and beverages was particularly low at 0.54 per cent, while non-food and services rose by 3.94 per cent. Notably, the price of ghee and oil increased by over 10 per cent, whereas vegetables saw a decline of 7.04 Per cent.

Inflation varied by region, with Koshi Province recording the highest at 4.18 per cent, followed by Sudurpashchim at 3.86 per cent, while Gandaki experienced the lowest inflation at 1.75 per cent. Urban inflation stood at 2.66 per cent, marginally lower than rural inflation at 2.90 per cent.

Nepal’s foreign exchange reserves also saw significant improvement. Gross reserves rose by 25.9 per cent to Rs.2,569.38 billion (USD 18.65 billion) by mid-June 2025, up from Rs. 2,041.10 billion (USD 15.27 billion) in mid-July 2024. Of this, NRB’s own reserves reached Rs.2,274.47 billion, while reserves held by banks and financial institutions grew to Rs. 294.92 billion. Indian currency accounted for 20.5 per cent of the total reserves.

Likewise, the NRB reported that on the foreign exchange adequacy front, current reserves are sufficient to cover 17.6 months of goods imports and 14.7 months of combined goods and services imports. Key reserve ratios – reserves-to-GDP and reserves-to-imports – stood at 42.1 per cent and 122.9 per cent respectively.

The current account remained in surplus at Rs. 307.31 billion (USD 2.26 billion), an improvement from Rs.200.38 billion (USD 1.51 billion) a year earlier. Likewise, the balance of payments (BOP) posted a surplus of Rs.491.44 billion (USD 3.62 billion), up from Rs.425.67 billion (USD 3.2 billion). Foreign direct investment (equity only) reached Rs.11.09 billion, also reflecting increased investor confidence.

Published in The Rising Nepal daily on 9 July 2025.   

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