Inflation on the rise; BOP remains at deficit of Rs 268.26bn

KATHMANDU: Inflation and balance of payments (BOP) deficit have increased in the first nine months of the current fiscal year, according to macroeconomic and financial situation report released by Nepal Rastra Bank (NRB) today. The annual consumer inflation of the country remained at 7.28% (mid-March to mid-April) against 3.10% in the corresponding month of the previous year. BOP remained at a deficit of Rs.268.26 billion in the review period against a surplus of Rs.42.54 billion in the same period of the previous year. In the US Dollar terms, the BOP remained at a deficit of 2.25 billion in the review period against a surplus of 348.1 million in the same period of the previous year. The total foreign exchange reserves decreased 16.5% to Rs.1167.92 billion in mid-April 2022 from Rs.1399.03 billion in mid-July 2021. In the US dollar terms, the gross foreign exchange reserves decreased 18.2% to 9.61 billion in mid-April 2022 from 11.75 billion in mid-July 2021. Out of the total foreign exchange reserves, the reserves of NRB decreased by 17.9% to Rs 1021.45 billion in mid-April 2022 from Rs1244.63 billion in mid-July 2021. The reserves held by other banks and financial institutions (BFIs) decreased 5.1% to Rs146.48 billion in mid-April 2022 from Rs154.39 billion in mid-July 2021. Likewise, the share of Indian currency in total reserves stood at 24.3% in mid-April 2022. Remittance inflows decreased 0.6% to Rs.724.74 billion in the review period against an increase of 16.5% in the same period of the previous year. In the US Dollar terms, remittance inflows decreased 2.2% to 6.05 billion in the review period against an increase of 13.1% in the same period of the previous year. During the nine months of 2021/22, merchandise exports increased 69.4% to Rs160.57 billion compared to an increase of 20.2% in the same period of the previous year. Destination-wise, exports to India and other countries increased 86.9% and 25.5% respectively whereas exports to China decreased by 21.8%.