Foreign exchange reserves reached 20 trillion, government finances have not improved

External indicators now give the government enough room to spend. Experts say that the inability to spend even in such a situation is a weakness of the government. With only 7 days left for the end of the current fiscal year, even though the government's accounts have been closed according to law, neither the government's revenue collection nor foreign aid and subsidies are satisfactory.

While capital expenditure has not come close to the target, the situation of total expenditure is also the same. Experts say that even though the external sector has become strong, the government has not been able to use that opportunity. They say that the economy has not become sustainable due to government expenditure not being expected.

According to Nepal Rastra Bank's monthly report, the country's foreign exchange reserves have continued to set new records in May. Last May, the total foreign exchange reserves reached around 20 trillion rupees. This is an increase of 27.8 percent compared to June last year. Due to the continuous increase in remittances, the tightening of the tourism sector, and the continuous decrease in imports, foreign exchange reserves have been continuously making new records every month this year. About 25 months ago, the condition of foreign exchange reserves was critical.

In the financial year 079/80, the reserve was reduced to 11 trillion 46 billion (9 billion 25 million US dollars). After the continuous decrease in reserves, the government banned the import of 10 types of goods, while the National Bank also made arrangements to keep a cash margin when opening securities. Policymakers were spreading fears of the country 'becoming a Sri Lanka' as foreign exchange reserves dwindled. For this reason, the government adopted a strict policy to reduce imports. Due to the government's decision, there was a slowdown in economic activity when the import decreased.

The foreign exchange reserves, which are of interest to the government, began to improve. Now the situation has changed. There is no situation in which the foreign exchange reserves are under pressure when some foreign currency goes out of the country due to excess imports or any other reason. According to Rashtra Bank, as of last May, the reserves reached 19 trillion 67 billion 19 billion rupees, a new record has been set for the 12th time.

Rashtra Bank claims that this reserve will cover 15.1 months of goods and 12.6 months of goods and services imports. In the current fiscal year, the National Bank had set a target of maintaining foreign exchange reserves sufficient to cover at least 7 months of imports. 081 Foreign exchange reserves in the country as a proportion of gross domestic product (GDP) are 34.5 percent at the end of May.

Rashtra Bank spokesperson Gunakar Bhatt said that since the external sector is continuously becoming stronger, the economy will become stronger if we can increase the development work and capital expenditure. There is a continuous improvement in the foreign exchange reserves, the current account and the current account balance are also continuously increasing,' he said Along with foreign exchange reserves, current account, current account balance, remittances and other indicators have also improved, according to the report of Rashtra Bank. As of the end of May, there is a surplus of 2.39 billion in the current account. During the same period of the previous year, the current account was at a loss of 79 billion 53 million.

Current account, which was in deficit by 61.32 million in US dollars during the same period of the previous year, is in surplus by 1.51 billion during the review period. Until May, the current account balance is in surplus by 4.25 billion 67 million. During the same period of the previous year, the balance sheet was in surplus by 2 trillion 24 billion 90 million. Similarly, in 11 months of the current financial year, 13 trillion 27 billion 51 million remittances have been received. Remittances have increased by 19.3 percent compared to last year. The remittance received last May is more than the previous month.

Only 1 trillion 29 billion rupees of remittances have entered the country in May. According to the Rastra Bank, the consumer price increase in May decreased to 4.17 percent. According to the bank, this price increase was 6.83 percent in the same month of the previous year. The decline in the price increase of the non-food and services group resulted in a decrease in the overall price increase. In the review month, the price increase of food and beverages group is 5.76 percent and the price increase of non-food and services group is 2.94 percent. Although the report points out that the price increase has come down, the general public has not been able to feel it.

According to Rashtra Bank, in the month under review, the annual spot price index of vegetables sub-group under the food and beverages group was 16.02 percent, pulses and pulses 11.76 percent, food and food products 7.32 percent, sugar and sugar products 6.98 percent. percent and non-alcoholic beverages have increased by 5.95 percent.

Although the overall price increase is low, there is still pressure on food items. 5.76 percent is not less. The price of food items is high, it is expensive for common people," said spokesperson Bhatt. "The price increase of non-food and service group is 2.94 percent. According to the report, the annual spot price index of ghee and oil sub-group has decreased by 5.51 percent.

Under the non-food and services group, the annual point price index of miscellaneous goods and services sub-group has increased by 12.47 percent, education by 5.64 percent and clothing and footwear by 3.46 percent. In May, the consumer price increase rate of Kathmandu Valley is 4.25 percent, Terai 3.82 percent, Hills 4.63 percent and Himalayas 4.77 percent. In the same month of the previous year, the price increase of Kathmandu Valley was 7.19 percent, Terai 6.93 percent, Hills 6.28 percent and Himals 6.39 percent, according to the National Bank.