KATHMANDU, JUNE 16

The latest Macroeconomic Update of Nepal Rastra Bank has revealed that financial transactions worth over Rs 4.24 trillion were carried out through 37.85 million transactions utilising various payment instruments in the lockdown period.

According to the NRB report unveiled today, 10.44 million transactions were carried out from March 24 to mid-April through various payment instruments, including automated teller machines, mobile banking, point of sales, among others that amounted to Rs 1.25 trillion.

The number of such transactions had surged to 16.23 million between mid-April and mid-May that totalled Rs 1.5 trillion. The transaction amount through such payment instruments, however, dropped to Rs 1.49 trillion through 11.18 million transactions between mid- May and mid-June.

While the development of payment infrastructure and increasing use of electronic payment instrument facilitated financial transactions even during the lockdown period, the stay-at-home order and other restrictions adversely affected government's revenue mobilisation, expenditure, remittances, bank credit and other economic activities, as per the report of the first 10 months (mid-July to mid-May) of fiscal year 2019-20.

During the 10 months of the review period, fiscal position of the government, based on banking transactions, remained at a deficit of Rs 129.18 billion compared to a deficit of Rs 0.44 billion in the same period of the previous year.

Remittance inflows decreased by 6.1 per cent to Rs 680.84 billion in the review period against an increase of 19.6 per cent in the same period of the previous year.

The central bank report also reveals that the lockdown caused the total trade deficit to narrow down by 14.2 per cent to Rs 943.07 billion in the first 10 months of fiscal year 2019-20.

According to the update, the export-import ratio increased to eight per cent in the review period from 6.7 per cent in the corresponding period of the previous year.

In the review period, merchandise exports increased by 4.5 per cent to Rs 82.06 billion compared to an increase of 18.9 per cent a year ago. Meanwhile, merchandise imports decreased by 13 per cent to Rs 1,025.14 billion against an increase of 19.6 per cent in the same period of the previous year.

Based on the imports of the 10 months of 2019-20, the foreign exchange reserves of the banking sector is sufficient to cover the prospective merchandise imports of 12.2 months, and merchandise and services imports of 10.8 months.

Meanwhile, net services income remained at a deficit of Rs 3.13 billion in the review period compared to a deficit of Rs 8.17 billion in the same period of the previous year.

Under the service account, travel income decreased 12.4 per cent to Rs 56.62 billion in the review period, which was Rs 64.61 billion in the same period of the previous year. Travel payments decreased 31.3 per cent to Rs 50.80 billion, including Rs 24.86 billion for education.

Such payments were Rs 73.98 billion and Rs 37.67 billion, respectively, in the same period of the previous year.

The year-on-year consumer price inflation stood at 5.83 per cent in mid-May compared to 5.29 per cent a year ago.

Food and beverage inflation stood at 8.66 per cent, whereas non-food and service inflation stood at 3.67 per cent in the review month.

A version of this article appears in e-paper on June 17, 2020, of The Himalayan Times.