Nepal’s Remittance Inflow Reaches Rs 900 Billion in Seven Months

The inflow of remittances to Nepal has reached Rs 900.58 billion in the first seven months of the current fiscal year, marking a 7.3 percent increase compared to the same period last year, according to the Nepal Rastra Bank (NRB). The central bank’s latest report on Nepal’s macroeconomic and financial situation, released on Monday, highlights that remittance growth has slowed from the 18.8 percent increase recorded in the previous year.

In US dollar terms, remittance inflows stood at $6.65 billion, reflecting a 5.3 percent rise compared to a 16.4 percent increase in the same period last year. During this period, 274,622 Nepali workers obtained first-time approval for foreign employment, while 190,886 individuals secured re-entry permits.

The report also noted that consumer price inflation was recorded at 4.16 percent in mid-February, down from 5.01 percent a year earlier. Food and beverage inflation stood at 4.95 percent, while non-food and service inflation was at 3.74 percent.

Nepal’s net services income recorded a deficit of Rs 50.22 billion, widening from Rs 36.38 billion in the same period last year. Travel income increased by 7.7 percent to Rs 49.21 billion, while travel-related payments surged by 10.6 percent to Rs 115.88 billion, including Rs 64.15 billion spent on education.

Provincial governments mobilized Rs 101.89 billion in resources during the review period, of which Rs 80.94 billion came from federal grants and revenue transfers, while Rs 20.95 billion was generated through provincial revenues and other receipts. Total expenditure at the provincial level stood at Rs 51.90 billion.

On the fiscal front, recurrent expenditure amounted to Rs 522.63 billion, capital expenditure reached Rs 68.42 billion, and financial expenditure stood at Rs 163.81 billion.

Nepal’s foreign exchange reserves saw a significant rise, with reserves held by NRB increasing by 13.9 percent to Rs 2,105.14 billion as of mid-February, up from Rs 1,848.55 billion in mid-July 2024. Reserves held by banks and financial institutions, excluding NRB, grew by 37.1 percent to Rs 263.93 billion from Rs 192.55 billion over the same period.

Based on the country’s import trends, the foreign exchange reserves are currently sufficient to cover 17.2 months of merchandise imports and 14.4 months of combined merchandise and services imports.

The Balance of Payments (BOP) recorded a surplus of Rs 284.41 billion in the review period, slightly lower than the Rs 297.72 billion surplus in the same period last year.