The current account maintained a surplus of Rs.166.80 billion during the review period, showing an increase from a surplus of Rs.162.52 billion in the same duration of the prior year, as reported by the Nepal Rastra Bank (NRB) in its ‘Current Macroeconomic and Financial Situation of Nepal (Based on Seven Months Data Ending Mid-February, 2024/25) Report.
In terms of US Dollars, the current account observed a surplus of 1.24 billion in the review period compared to a surplus of 1.22 billion during the same timeframe last year.
During this review period, net capital transfers totaled Rs.5.83 billion, while in the corresponding period of the last year, such transfers amounted to Rs.3.80 billion.
Correspondingly, the review period recorded Rs.7.45 billion in foreign direct investment (equity only), whereas the previous year’s equivalent for foreign direct investment (equity only) was Rs.5.19 billion.
The Balance of Payments (BOP) retained a surplus of Rs.284.41 billion this review period, in contrast to a surplus of Rs.297.72 billion during the same period last year. In US Dollar terms, the BOP also maintained a surplus of 2.11 billion in the review period compared to 2.24 billion in the same timeframe of the previous year.
Foreign Exchange Reserves
Gross foreign exchange reserves experienced a growth of 16.1 percent, reaching Rs.2369.08 billion in mid-February 2025, up from Rs.2041.10 billion in mid-July 2024. In US dollar terms, these gross reserves rose 11.7 percent to 17.05 billion in mid-February 2025 from 15.27 billion in mid-July 2024.
Within the total foreign exchange reserves, the reserves under NRB’s custody increased by 13.9 percent to Rs.2105.14 billion in mid-February 2025 from Rs.1848.55 billion in mid-July 2024.
Reserves held by financial institutions and banks (excluding NRB) saw a significant rise of 37.1 percent, reaching Rs.263.93 billion in mid-February 2025 from Rs.192.55 billion in mid-July 2024. The proportion of Indian currency in total reserves accounted for 22.0 percent in mid-February 2025.
Foreign Exchange Adequacy Indicators
Based on the imports for the seven months of 2024/25, the banking sector’s foreign exchange reserves are sufficient to cover anticipated merchandise imports for 17.2 months and both merchandise and services imports for 14.4 months.
The ratios of reserves-to-GDP, reserves-to-imports, and reserves-to-M2 were recorded at 41.5 percent, 120.3 percent, and 32.5 percent, respectively, in mid-February 2025. In mid-July 2024, these ratios were 35.8 percent, 108.6 percent, and 29.3 percent, respectively.
