KATHMANDU, JULY 15
Nepal's Balance of Payments (BoP) recorded a deficit of Rs 15.15 billion in the first 11 months of the current fiscal year (mid-July to mid-June) against a surplus of Rs 179.37 billion in the same period of the previous year. BoP is basically a statement of all transactions made between entities in one country and the rest of the world over a defined period.
The latest macroeconomic report unveiled by the Nepal Rastra Bank (NRB) today revealed that merchandise exports surged by 37.8 per cent to Rs 121.25 billion in the review period compared to an increase of 0.2 per cent in the same period of the previous year. At the same time, merchandise imports jumped 25.7 per cent to Rs 1,383.36 billion against a decrease of 15.3 per cent a year ago. This mismatch resulted in a trade deficit of a staggering Rs 1,262.11 billion, which was a jump of 24.6 per cent compared to a decline of 16.4 per cent in the same period of the previous year.
The export-import ratio increased to 8.8 per cent in the review period from eight per cent in the same period of the previous year.
The country's gross foreign exchange reserves fell 2.6 per cent to Rs 1,365.65 billion in mid-June from Rs 1,401.84 billion in mid-July of 2020. Based on the imports during the 11 months of 2020-21, the foreign exchange reserves of the banking sector is sufficient to cover the prospective merchandise imports of 11.1 months, and merchandise and services imports of 10.1 months.
The current account too remained at a deficit of Rs 293.97 billion in the review period compared to a deficit of Rs 62.59 billion in the same period of the previous year.
Meanwhile, remittance inflows increased 12.6 per cent to Rs 870.94 billion in the review period against a decrease of 3.2 per cent in the same period of the previous year. This was despite the fact that the number of Nepali workers (institutional and individual - new and legalised) taking approval for foreign employment decreased 59.9 per cent in the review period.
It had decreased 12.4 per cent in the same period of the previous year. The number of Nepali workers (renew entry) taking approval for foreign employment also dropped 47.1 per cent in the review period against a decline of 31.1 per cent in the same period of the previous year.
The report further reveals that as of mid-June, NRB approved Rs148.35 billion in refinancing.
The outstanding amount of refinance remained at R.127.09 billion.
As of mid-June 2021, the outstanding concessional loan was Rs 150.96 billion extended to 96,852 borrowers, with Rs.102.83 billion extended to 44,007 borrowers for selected commercial agriculture and livestock businesses. Likewise, Rs 44.66 billion loan had been extended to 50,513 women entrepreneurs.
A total of 2,332 borrowers had availed Rs 3.47 billion in concessional loan to other sectors.
Business continuity loan was extended to the COVID-19 affected tourism, cottage, small and medium industries for payment of salaries to workers and employees in line with 'Business Continuity Loan Procedure, 2020'. Under this provision, loan of Rs 822.4 million was approved as of mid-June.
A version of this article appears in the print on July 16 2021, of The Himalayan Times.