Nepal’s Current Account Deficit Continues To Widen

Nepal’s Current Account Deficit Continues To Widen

May 12, 2022, 8:18 a.m.

Nepal Rastra Bank (NRB) says the current account deficit has widened by Rs. 49.78 billion in a month from mid-March to mid-April 2022.

The current account remained at a deficit of Rs. 512.71 billion by mid-April compared to a deficit of Rs. 462.93 billion in mid-March, according to the 'Current macroeconomic and financial situation' report of the NRB. Report of the first nine months of the current fiscal year 2021/22 was published on Wednesday. Such deficit was Rs. 210.51 billion in the same period of the previous year 2020/21. The current account deficit was in the upward trend that year as well, it widened by Rs. 59.09 billion in a month from mid-March to mid-April 2021.

Likewise, the Balance of Payments (BOP) remained at a deficit of Rs. 268.26 billion by mid-April against the deficit of Rs. 258.64 billion in mid-March. BOP was in a surplus of Rs. 42.54 billion in the same period of the previous year.

The central bank has implemented a cash margin while opening the Letter of Credit (LC) of various luxury goods and the government has restricted the import of 10 goods to prevent the foreign exchange reserves from further depletion.

During the nine months of 2021/22, merchandise imports increased by 32.0 percent to Rs. 1466.66 billion compared to an increase of 13.1 percent a year ago. Of the total imports, the share of intermediate goods remained 53.2 percent, capital goods 10.5 percent and final consumption goods remained 36.3 percent in the review period.

Source: The Rising Nepal

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