Foreign Exchange Reserves rises by 27.8 per cent

The Gross foreign exchange reserve of the country has increased by 27.8 percent to Rs.1967.19 billion as of mid-June 2024 from Rs.1539.36 billion in mid-July 2023. In US dollar terms, the gross foreign exchange reserves increased 25.7 percent to 14.72 billion in mid-June 2024 from 11.71 billion in mid-July 2023.

According to a statement released on the ‘Current Marcoeconomic and financial situation’ of the country based 11 months data as of mid-June, of the total foreign exchange reserves, reserves held by NRB increased 30.2 percent to Rs.1752.77 billion in mid-June 2024 from Rs.1345.78 billion in mid-July 2023. Reserves held by other banks and financial institutions increased 10.8 percent to Rs.214.42 billion in mid-June 2024 from Rs.193.59 billion in mid-July 2023. The share of Indian currency in total reserves stood at 22.3 percent in mid-June 2024.

Likewise, Balance of Payments (BOP) remained at a surplus of Rs.425.67 billion in the review period against a surplus of Rs.224.9 billion in the same period of the previous year.

The current account remained at a surplus of Rs.200.39 billion in the review period against a deficit of Rs.79.53 billion in the same period of the previous year. In the review period, capital transfer decreased 25.7 percent to Rs.5.46 billion and net foreign direct investment (FDI) remained a positive of Rs.8.16 billion. In the same period of the previous year, capital transfer amounted to Rs.7.35 billion and net FDI amounted to Rs.4.65 billion.

Furthermore, the consumer price inflation moderated to 4.17 percent in mid-June 2024 compared to 6.83 percent a year ago. Food and beverage category inflation stood at 5.76 percent whereas non-food and service category inflation stood at 2.94 percent in the review month.

During the period, the total trade deficit decreased 1.7 percent to Rs.1314.44 billion. Such deficit had decreased 15.2 percent in the corresponding period of the previous year. The export import ratio decreased to 9.6 percent in the review period from 9.7 percent in the corresponding period of the previous year.

This is due to decrease in merchandise exports by 3.0 percent to Rs.139.26 billion compared to a decrease of 22.7 percent in the same period of the previous year. Exports to India decreased 4.5 percent while that to China increased 57.7 percent. Similarly, export to other countries decreased 1.7 percent. Exports of zinc sheet, particle board, juice, readymade garment, and oil cakes among others increased whereas exports of palm oil, soyabean oil, woolen carpet, brans, tea among others decreased.

In the review period, total revenue mobilization of the Government (including the amount to be transferred to provincial and local governments) stood at Rs.919.19 billion. Revenue mobilization recorded a growth of 9.8 percent in the review period in contrast to decrease of 11.2 percent in the same period of last fiscal year. The tax revenue amounted Rs.829.04 billion and non tax revenue Rs.90.15 billion in the review period.

According to Ministry of Finance, Financial Comptroller General Office (FCGO), the total expenditure of the Government stood at Rs.1181.30 billion during the eleven months of 2023/24.

Compared to a growth of 13.6 percent in the last fiscal year, government expenditure increased by 0.4 percent in the review period. The recurrent expenditure, capital expenditure and financial expenditure amounted to Rs.822.81 billion, Rs.134.98 billion and Rs.223.51 billion respectively in the review period.

In the meantime, remittance inflows increased 19.3 percent to Rs.1327.51 billion in the review period compared to an increase of 22.7 percent in the same period of the previous year. In the US Dollar terms, remittance inflows increased 17.3 percent to 9.98 billion in the review period compared to an increase of 13.0 percent in the same period of the previous year.