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Nepal records Rs 904.18bn remittance inflows in 11 months of current FY

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KATHMANDU: The country’s remittance inflows increased 3.8% to Rs 904.18 billion in the first 11 months of the current fiscal year 2021/22, according to macroeconomic data released by Nepal Rastra Bank (NRB) on Monday. In the same period of the previous fiscal year, the remittance inflows had increased 12.6%. In US Dollar terms, remittance inflows increased 4 1.5% to 7.51 billion in the review period against an increase of 10.5% in the same period of the previous year. Likewise, the y-o-y consumer price inflation stood at 8.56% in the 11th month of the current fiscal year compared to 4.19% a year ago. Food and beverage inflation stood at 7.43% while non-food and service inflation stood at 9.44% in the review month. The average monthly y-o-y inflation for 11 months was 6.09%. Under the food and beverage category, the prices of ghee, oil, milk products & eggs, tobacco products, alcoholic drinks and pulses and legumes sub-categories rose by 22.60%, 11.22%, 9.70%, 9.68% and 9.13% respectively on y-o-y basis. Likewise, under the non-food and services category, the prices of transportation, education, furnishing and household equipment, recreation and culture, and housing and utilities sub-categories rose by 25.79%, 11.64%, 8.30%, 8.21% and 7.84% respectively on y-o-y basis. During 11 months in the current fiscal year, merchandise imports increased 27.5% to Rs 1763.22 billion compared to an increase of 25.7% last year. Destination-wise, imports from India, China and other countries increased 24.2%, 16.0%, and 46.1% respectively. Imports of petroleum products, medicine, crude palm oil, gold, and other machinery and parts, among others, increased while imports of MS billet, chemical fertiliser, cement, rice/paddy, pulses, among others, decreased in the review period. Likewise, merchandise exports increased 53.3% to Rs 185.84 billion compared to an increase of 37.8% in the same period of the previous year. Destination-wise, exports to India and other countries increased 61.8% and 30.1% respectively while exports to China decreased by 21.4%. Exports of palm oil, soyabean oil, polyester yarn and thread, woollen carpets, zinc sheet, among others, increased while exports of cardamom, tea, medicine (ayurvedic), toothpaste, wire, among others, decreased in the review period. The country’s total trade deficit increased 25.0% to Rs 1577.39 billion during 11 months of the current fiscal year. Such a deficit had increased 24.6% in the corresponding period of the previous year. The export-import ratio increased to 10.5% in the period of 11 months from 8.8% in the corresponding period of the previous fiscal year. The net foreign assets (NFA after adjusting foreign exchange valuation gain/loss) decreased by Rs 269.81 billion (20.2%) in the review period compared to the decrease of Rs 15.15 billion (1.1%) in the corresponding period of the previous year. Gross foreign exchange reserves decreased 15.9% to Rs 1176.84 billion in mid-June 2022 from Rs 1399.03 billion in mid-July 2021. In US dollar terms, the gross foreign exchange reserves decreased 19.6% to 9.45 billion in mid-June 2022 from 11.75 billion in mid-July 2021. 26. Of the total foreign exchange reserves, reserves held by NRB decreased 17.1% to Rs 1031.89 billion in mid-June 2022 from Rs 1244.63 billion in mid-July 2021. Reserves held by banks and financial institutions (except NRB) decreased 6.1% to Rs.144.95 billion in mid-June 2022 from Rs 154.39 billion in mid-July 2021. The share of Indian currency in total reserves stood at 25% in mid-June 2022. During the eleven months of 2021/22, the total expenditure of the federal government according to data from the Financial Comptroller General Office (FCGO), Ministry of Finance, stood at Rs 1035.61 billion. The recurrent expenditure, capital expenditure and financial expenditure amounted to Rs 814.54 billion, Rs 137.96 billion and Rs 83.10 billion respectively in the review period, according to NRB. Likewise, the data released by the central bank shows that broad money (M2) increased 3.9% in the review period compared to a growth of 16.1% in the corresponding period of the previous year. On y-o-y basis, M2 expanded 9.0% in mid-June 2022. Deposits at banks and financial institutions (BFIs) increased 5.7% in 11 months compared to an increase of 15.3% in the corresponding period in the previous year. On y-o-y basis, deposits at BFIs expanded 11.3% in mid-June 2022. READ ALSO: