Nepal Rastra Bank reports that foreign currency reserve of Nepal is further dwindling due to decline of the inflow of the remittance in the last four months.
According to NRB, Nepal received Rs. 312.42 billion in the review period against an increase of 11.2 per cent in the same period of the previous year.
As the remittance inflow down, it is putting pressure on foreign currency reserve. The gross foreign exchange reserves has decreased by 11 per cent to Rs. 1244.85 billion by mid-November 2021 from Rs. 1399.03 billion in mid-July 2021 reports The Rising Nepal.
In the US dollar terms, the gross foreign exchange reserves decreased by 10.9 per cent to 10.47 billion in mid-November 2021 from 11.75 billion in mid-July 2021, according to macroeconomic and financial report of NRB.
Of the total foreign exchange reserves, reserves held by NRB decreased by 11 per cent to Rs. 1107.47 billion in mid-November 2021 from Rs. 1244.63 billion in mid-July 2021.
Reserves held by banks and financial institutions (except NRB) decreased by 11 per cent to Rs. 137.38 billion in mid-November 2021 from Rs. 154.39 billion in mid-July 2021.
The share of Indian currency in total reserves stood at 26.1 per cent in mid-November 2021.
Based on the imports of four months of 2021/22, the foreign exchange reserves of the banking sector is sufficient to cover the prospective merchandise imports of 7.9 months and merchandise and services imports of 7.2 months reports the daily.
The ratio of reserves-to-GDP (previous fiscal year), reserves-to-imports and reserves-to-M2 stood at 29.2 per cent, 60.0 per cent and 23.8 per cent respectively in mid-November 2021.
Such ratios were 32.8 per cent, 84.7 per cent and 27.1 per cent respectively in mid-July 2021.
During the four months of 2021/22, merchandise exports increased by 104.3 per cent to Rs.82.12 billion and import by 61.6 per cent to Rs. 650.29 billion.
The trade deficit has increased by 56.8 per cent to Rs. 568.17 billion during the four months of 2021/22.