Foreign exchange reserves increase

Himalayan News Service

Kathmandu, January 11:

Gross foreign exchange reserve has posted an increment to Rs 131.1 billion during the four months of the current fiscal year 2004-05. According to the Nepal Rastra Bank (NRB) report published yesterday this amount of foreign currency reserve is said to be enough to cover merchandise imports for 12.6 months. Not only that, it will also cover the service imports of 10.8 months as per the requirements, further states the NRB report.

The balance of payments (BoP) during the first four months of the current fiscal year has also remained favourable, which stands at Rs 2 billion. According to the NRB report, exports accelerated as against the decline in imports, resulting in the trade deficit contraction. It states that the inflation has also decelerated and hovers around three per cent. Though the revenue mobilisation decelerated, total resource has increased faster than the expenditure, resulting in the substantial decline in the budget deficit. The NRB report states that total government expenditure has also decelerated on cash basis. Stock exchange transactions as well as the NEPSE index has also registered an increment.

During the first four months of the current fiscal year, broad money has increased to 3.6 per cent in comparison to 1.2 per cent last year.