How Did We Perform As a Nation in First Month of Fiscal Year 2082/83? A Quick Macroeconomic Summary

Nepal Rastra Bank, the central bank of Nepal, has unveiled the current macroeconomic and financial situation of Nepal based on One Month Data (Ending Mid-August) of FY 2025/26

Overall
Nepal Rastra Bank estimated that the inflation remained at 1.68 percent on a year-over-year basis. The gross foreign exchange reserves stood at 20.03 billion in USD terms, whereas the total imports and exports increased 11.4 percent and 95.7 percent, respectively.

NEPSE index stood 2788.37 in midAugust 2025 compared to 3000.81 in mid-August 2024

Inflation
The y-o-y consumer price inflation stood at 1.68 percent in mid-August 2025 compared to 4.09 percent a year ago.

The y-o-y wholesale price inflation stood at 2.37 percent in mid-August 2025 compared to 3.66 percent a year ago. The y-o-y wholesale price inflation of consumption goods stood at 6.57 percent while intermediate goods and capital goods stood at -0.12 percent and 2.96 percent respectively. The y-o-y wholesale price index of construction material increased 4.08 percent in the review month.

Import and Export

During the first month of 2025/26, merchandise exports increased 95.7 percent to Rs.23.93 billion against a decrease of 9.6 percent in the same period of the previous year. Destination-wise, exports to India increased 156.7 percent whereas exports to
China and other countries decreased 65.2 percent and 1.4 percent respectively. Exports of soyabean oil, palm oil, polyster yarn and thread, cardamom and jute goods among others increased whereas exports of zinc sheet, particle board, woolen carpet, oil cakes and tea among others decreased in the review period.

During the first month of 2025/26, mercandise imports increased 11.4 percent to Rs.143.04 billion against a decline of 0.6 percent a year ago. Destination-wise, imports from India, China, and other countries increased 7.5 percent, 14.1 percent, and 20.5 percent respectively. Imports of crude soyabean oil, transport equipment, vehicle and spare parts, rice/paddy, coal and chemical fertilizer
among others increased whereas imports of hot rolled sheet in coil, edible oil, petroleum products, other machinery and parts and oil seeds among others decreased in the review period.

Total trade deficit increased 2.5 percent to Rs.119.11 billion during the first month of 2025/26. Such a deficit had increased 0.4 percent in the corresponding period of the previous year. The export-import ratio increased to 16.7 percent in the review period from 9.5 percent in the corresponding period of the previous year.

Services and Remittance
Net services income remained at a deficit of Rs.13.39 billion during the review period. Such income had a deficit of Rs.15.06 billion in the same period of the previous year.

Remittance inflows increased 29.9 percent to Rs.177.41 billion in the first month of 2082/83. Remittance inflow had increased 17.7 percent to Rs.136.60 billion in the same period of the previous year. In the US Dollar terms, remittance inflows increased 25.0 percent to 1.27 billion in the review period. Such inflow had increased 15.8 percent in the same period of the previous year.

Inter-bank Transaction
In the review period, BFIs inter-bank transactions amounted Rs.94.94 billion on a turnover basis, including Rs.87.49 billion inter-bank transactions among commercial banks, and Rs.7.45 billion among other financial institutions (excluding transactions among commercial banks). In the corresponding period of the previous year, such transaction was Rs.52.15 billion, including Rs.51.50 billion among commercial banks and Rs.0.65 billion among other financial institutions (excluding transactions among commercial banks).

Price of Oil and Gold
The price of oil (Crude Oil Brent) in the international market decreased 17.5 percent to US dollar 67.30 per barrel in mid-August 2025 from US dollar 81.56 per barrel a year ago. The price of gold increased 34.2 percent to US dollar 3335.50 per ounce in mid-August 2025 from US dollar 2485.80 per ounce a year ago.

Foreign Exchange Reserves and Adequacy Indicator
Gross foreign exchange reserves increased 4.8 percent to Rs.2806.04 billion in mid-August 2025 from Rs.2677.68 billion in mid July 2025. In the US dollar terms, the gross foreign exchange reserves increased 2.7 percent to 20.03 billion in mid-August 2025 from 19.50 billion in mid-July 2025.

Of the total foreign exchange reserves, the reserves held by NRB increased 4.0 percent to Rs.2511.45 billion in mid-August 2025 from Rs. 2414.64 billion in mid-July 2025. Reserves held by banks and financial institutions (except NRB) increased 12.0 percent to Rs.294.58 billion in mid-August 2025 from Rs.263.04 billion in mid-July 2025. The share of Indian currency in total reserves stood at 23.4 percent in mid-August 2025.

Based on the imports of the first month of 2025/26, the foreign exchange reserves of the banking sector is sufficient to cover the prospective merchandise imports of 20.4 months, and merchandise and services imports of 16.6 months. The ratio of reserves-to-GDP, reserves-toimports and reserves-to-M2 stood at 45.9 percent, 138.3 percent, and 36.0 percent respectively in mid-August 2025. Such ratios were 43.8 percent, 128.1 percent, and 34.1 percent respectively in mid-July 2025.

Exchange Rate
Nepalese currency vis-à-vis the US dollar depreciated 2.0 percent in mid-August 2025 from mid-July 2025. It had depreciated 0.5 percent in the same period of the previous year. The buying exchange rate per US dollar stood at Rs.139.79 in mid-August 2025 compared to Rs.137 in mid-July 2025.

Nepal Government Expenditure and Revenue
According to Ministry of Finance, Financial Comptroller General Office (FCGO), the total expenditure of the Nepal Government stood at Rs.46.31 billion during the first month of 2025/26. The recurrent expenditure, capital expenditure and financial expenditure amounted to Rs.18.48 billion, Rs.0.73 billion and Rs.27.10 billion respectively in the review period. In the review period, total revenue mobilization of Nepal Government (including the amount to be transferred to provincial and local governments) stood at Rs.84.47 billion. The tax revenue amounted Rs.80.67 billion and non tax revenue Rs.3.80 billion in the review period.

Cash Balance of Government
Cash Balance at various accounts of the GoN maintained with NRB remained Rs.226.64 billion (including Provincial Governments and Local Government Account) in mid-August 2025. Such balance was Rs.130.73 billion in mid-July 2025.

Banking
Domestic credit decreased 1.6 percent in the review period compared to a decrease of 0.8 percent in the corresponding period of the previous year. On y-o-y basis, domestic credit increased 5.4 percent in mid-August 2025.

Monetary Sector's net claims on government decreased 10.0 percent in the review period compared to a decrease of 6.9 percent in the corresponding period of the previous year. On y-o-y basis, such claims decreased 6.6 percent in mid- August 2025.

Deposits at Banks and Financial Institutions (BFIs) decreased Rs.55.79 billion (0.8 percent) reaching 7,208.09 billion in the review period compared to a decrease of Rs.43.45 billion (0.7 percent) in the corresponding period of the previous year. On y-o-y basis, deposits at BFIs expanded 12.5 percent in mid-August 2025.

Private sector credit from BFIs decreased Rs.2.93 billion (0.1 percent) in the review period reaching 5,495.0 billion compared to an increase of Rs.14.11 billion (0.3 percent) in the corresponding period of previous year.

Interest Rates
The average base rates of commercial banks, development banks and finance companies stood 5.78 percent, 7.28 percent, and 8.87 percent respectively in the first month of 2025/26. The average base rate of commercial banks, development banks and finance companies were 7.61 percent, 9.28 percent, and 10.75 percent respectively in the corresponding month a year ago.

Balance of Payments
Balance of Payments (BOP) remained at a surplus of Rs.89.30 billion in the review period. Such surplus was Rs.40.90 billion in the previous year. In the US Dollar terms, the BOP remained at a surplus of 641.2 million in the review period compared to a surplus of 305.1 million in the same period of the previous year.