Remittances worth Rs. 870 billion were received in the first five months of the current fiscal year, which is Rs. 230 billion more than the same period of the previous fiscal year.
What you should know
Remittances and total foreign exchange (currency) reserves entering the country have increased significantly. Remittance inflows have increased by 35.6 percent in the first five months of the current fiscal year. Similarly, total foreign exchange (currency) reserves have also increased by 19.6 percent.
According to the monthly report released by Nepal Rastra Bank on Friday, remittances of Rs 870 billion have been received in the five months of the current fiscal year. This is Rs 230 billion more than the same period of the previous fiscal year.
In the five months of the previous fiscal year, remittances of Rs 640 billion 430 million had been received. In the same period of the previous fiscal year, remittances had increased by 4.7 percent. In US dollars, remittances have increased by 29 percent in five months.
In Mangshur of the current fiscal year alone, remittances of Rs 183 billion 180 million have been received. In Mangshur of the previous fiscal year, remittances of Rs 18 billion 790 million had been received. In Kartik, remittances of Rs 133 billion 820 million had been received. If we compare the monthly remittance inflow, remittances of Rs 201 billion had been received in Asoj last year. Which is the highest so far.
In the five months of the current fiscal year, the number of Nepalis who received final labor permits (institutional and individual) for foreign employment is 175,591 and the number of those who received re-labor permits is 163,924. In the same period of the previous year, such numbers were 190,384 and 135,425, respectively.
As the external sector of the economy continues to strengthen, the government has a good opportunity to invest in infrastructure construction, reconstruction and development spending. Experts say that as the government increases spending, imports will increase and the country has sufficient foreign exchange reserves for imports, it should spend more.
The total foreign exchange reserves have reached 321.47 billion rupees by mid-Shrawan-Mansir. According to the Rastra Bank, they were 2677.68 billion rupees in mid-Ashar 2082. The country's foreign exchange reserves have been setting records for the past 39 months.
Remittances are increasing, exports are increasing at a high rate despite increasing imports, and sectors including tourism are improving. The foreign exchange reserves have been setting records every month for the past three years. The Rastra Bank has stated that this is sufficient to cover 21.7 months of goods imports and 18.2 months of goods and services imports. 'Based on imports up to five months of the fiscal year 2082/83, it appears that the foreign exchange reserves of the banking sector will be sufficient to cover 21.7 months of goods imports and 18.2 months of goods and services imports,' the report states.
The balance of payments position has also had a positive impact on the foreign exchange reserves as it has gone into surplus. In the five months of the current fiscal year, the balance of payments position has been seen in surplus by Rs 421.89 billion. While in the same period of the last fiscal year, the balance of payments position was in surplus by Rs 225.34 billion.
The balance of payments position indicates the difference between the amount leaving and entering the country. When the amount entering the country is more than the amount leaving the country, the balance of payments goes into surplus. According to the report, the balance of payments in US dollars is in surplus by 2.98 billion. In the same period of the last fiscal year, the balance of payments was in surplus by 1.68 billion.
Nepal Rastra Bank spokesperson Guru Prasad Poudel said that foreign exchange reserves have also increased as remittances increased by 35 percent. ‘Liquidity flow has increased due to the increase in remittances and foreign exchange reserves,’ he said, ‘Money supply has increased. However, the loans of banks and financial institutions are 102 billion rupees in five months. The interest rate has also come to the lower limit of the interest rate corridor.
If interest rates continue to decline, credit cannot flow and liquidity increases, Nepal Rastra Bank will face additional pressure for management, says Poudel. He said that we have not been able to utilize the potential opportunity for monthly growth in income generation and employment creation to the best of our ability. ‘We had the potential opportunity for monthly growth in income generation and employment creation, but we lost it and could not do as much as we could,’ he said.
The average market price (consumer price inflation) of goods and services purchased by the general public was 1.63 percent in Mangesh, according to a report by Nepal Rastra Bank. It was 6.05 percent in the same period of the previous fiscal year. In Mangesh, the inflation (price inflation) of the food and beverage group was negative by 2.05 percent, while that of the non-food and service group was 3.75 percent. In the same period of the previous year, the inflation of these groups was 9.99 percent and 3.92 percent, respectively.
The average inflation for the five months of the fiscal year 2082/83 is 1.55 percent. The average inflation for the same period of the previous year was 4.89 percent. In Mangesh, the annual point consumer price index of the ghee and oil subgroup under the food and beverage group increased by 5.52, that of non-alcoholic beverages by 3.56, and that of dairy products and eggs by 2.44 percent. The annual point consumer price index of the vegetable subgroup has decreased by 8.54, that of spices by 8.43, and that of pulses and legumes by 5.79 percent.
The annual point consumer price index of the miscellaneous goods and services subgroup under the non-food and services group has increased by 18.56, that of education by 7.56, that of clothing and footwear by 5.29, that of tobacco products by 4.15, and that of alcoholic beverages by 3.85 percent. The annual point consumer price index of the insurance and financial services subgroup has decreased by 0.23 percent.
In Mangsir, the annual point consumer price index of the rural area has increased by 1.09 and the annual point consumer price index of the urban area by 1.83 percent. Despite the decrease in loan interest rates in the five months of the current fiscal year, credit flow has not increased significantly. Nepal Rastra Bank data shows that despite the continuous decrease in deposit and loan interest rates, credit flow has not increased significantly.
Credit investment has expanded by only 1.9 percent between Shrawan and Mangsir of the current fiscal year. According to the report, credit flow from banks and financial institutions to the private sector has increased by 1.9 percent in five months. The credit invested in the private sector has increased by 12.24 billion rupees to 55.99 billion rupees, the report of the Nepal Rastra Bank states.
Compared to the current fiscal year, credit flow to the private sector is 76 billion rupees less than the five months of the last fiscal year. Such credit had increased by 178.29 billion rupees (3.5 percent) in the same period of the last fiscal year.
The report of the Nepal Rastra Bank states that the weighted average interest rate on loans of commercial banks in 2082 Mangsir was 7.26 percent. Similarly, development banks have 8.49 percent and finance companies have 9.91 percent. In 2081 Mangsir, the weighted average interest rate on loans of commercial banks was 8.90 percent, development banks 10.26 percent and finance companies 11.48 percent.
Spokesperson Poudel also said that various tools are being used to keep the interest rate on deposits within the desired range. ‘Because of this, the National Bank has also incurred some financial burden. But we do not look at it in terms of profit and loss,’ he said. He said that banks and financial institutions are not very ‘motivated’ to provide small loans.
‘The rumors that have been circulating in the market about small loans recently. The trend that small loans do not have to be repaid has increased. That also does not seem to motivate banks and financial institutions.’ He said that the demand for loans from the private sector has not increased in terms of peace and security. ‘Overall, the demand for loans has not increased, which has also affected the flow of loans,’ he said.
