NRB monetary policy review: Current account at surplus of Rs 210.22bn, BOP at surplus of Rs 346.23bn

KATHMANDU: The current account remained at a surplus of Rs 210.22 billion in the last nine months of current fiscal year 2024/25 compared with a surplus of Rs 179.83 billion in the same period last year. In US dollar terms, the current account registered a surplus of 1.55 billion in the review period against a surplus of 1.35 billion in the same period last year.

Nepal Rastra Bank (NRB) stated this in its Review of the Monetary Policy for current fiscal year 2024/25.

The Balance of Payments (BOP) remained at a surplus of Rs 346.23 billion in the nine months of the current fiscal year compared with a surplus of Rs 365.16 billion in the same period last year. In US dollar terms, the BOP remained at a surplus of 2.55 billion in the review period compared with a surplus of 2.75 billion in the same period last year.

The central bank stated that in the review period, net capital transfers amounted to Rs 7.71 billion, while in the same period last year such transfers amounted to Rs 4.78 billion. Similarly, during the review period Rs 8.96 billion of foreign direct investment (equity only) was received, compared with Rs 6.49 billion in the same period last year.

Likewise, gross foreign exchange reserves increased 18.9% to Rs 2426.84 billion in mid-April 2025 from Rs 2041.10 billion in mid-July 2024. In US dollar terms, gross foreign exchange reserves increased 15.4% to 17.63 billion in mid-April 2025 from 15.27 billion in mid-July 2024.

Of the total foreign exchange reserves, the reserves held by the NRB increased 15.6% to Rs 2136.46 billion in mid-April 2025 from Rs 1848.55 billion in mid-July 2024. Reserves held by banks and financial institutions (BFIs) excluding the NRB increased 50.8% to Rs 290.38 billion in mid-April 2025 from Rs 192.55 billion in mid-July 2024.

The share of Indian currency in total reserves stood at 20.4% in mid-April 2025.

Based on the imports of the first nine months of the current fiscal year, the foreign exchange reserves of the banking sector are sufficient to cover prospective merchandise imports for 17.1 months and merchandise and services imports for 14.2 months. In mid-April 2025 the ratios of reserves-to-GDP, reserves-to-imports and reserves-to-M2 stood at 39.7%, 118.7% and 32.8% respectively, compared with 35.8%, 108.6% and 29.3% respectively in mid-July 2024.

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