Nepal’s forex reserves rise to USD 13. 69 billion

KATHMANDU: The half-yearly review of the current fiscal year 2080-81 BS (2-23-24), showed the Gross foreign exchange reserves stood at Rs 1816.57 billion and USD 13.69 billion, with a 18-percent rise in the past six months.

According to the current macroeconomic and financial situation of Nepal based on the six months data ending in mid-January assessed by the central bank, the current size of the foreign exchange reserves is bigger than the country’s annual budget and this is the highest forex reserves so far.

The report states gross foreign exchange reserves increased 18.0 percent to Rs 1816.57 billion in mid-January 2024 from Rs 1539.36 billion in mid-July 2023. In the US dollar terms, the gross foreign exchange reserves increased 16.9 percent to 13.69 billion in mid-January 2024 from 11.71 billion in mid-July 2023.

Of the total foreign exchange reserves, reserves held by NRB increased 18.9 percent to Rs 1600.23 billion in mid-January 2024 from Rs 1345.78 billion in mid-July 2023.

Reserves held by banks and financial institutions (except NRB) increased 11.8 percent to Rs 216.35 billion in mid-January 2024 from Rs 193.59 billion in mid-July 2023. The share of Indian currency in total reserves stood at 22.5 percent in mid- January 2024. Based on the imports of six months of 2023/24, the foreign exchange reserves of the banking sector are sufficient to cover the prospective merchandise imports of 14.5 months, and merchandise and services imports of 12.1 months. The ratio of reserves-to-GDP, reserves-to-imports and reserves to-M2 stood at 33.8 percent, 100.9 percent and 27.7 percent respectively in mid-January 2024.

Such ratios were 28.6 percent, 83 percent and 25 percent respectively in mid-July 2023.

The current account remained at a surplus of Rs 161.62 billion in the review period against a deficit of Rs 35.57 billion in the same period of the previous year. In US Dollar terms, the current account registered a surplus of 1.21 billion in the review period against a deficit of 279.6 million since the same period last year.