Macroeconomic Summary of First 9 Months: Inflation at 4.47%, Remittances Rises by 39.1%, Foreign Currency Enough to Cover 18.4 Months Import
Nepal Rastra Bank, the central bank of Nepal, has unveiled the current macroeconomic and financial situation of Nepal based on Nine months of data for FY 2025/26.
Overall
Nepal Rastra Bank estimated that the inflation remained at 4.47 percent on a year-over-year basis, which is in increasing trend. The gross foreign exchange reserves stood at Rs. 3,494.73 billion. Such reserve remained 23.55 billion in USD terms. The reserve is sufficient to cover the prospective merchandise and services imports of 18.4 months.
The NEPSE index stood at 2833.6 in mid-April 2026 compared to 2662.1 in mid-April 2025.
Inflation
The y-o-y consumer price inflation stood at 4.47 percent in mid-April 2026 compared to 2.39 percent a year ago. Inflation is in increasing trend, after lowest inflation rate was 1.11 percent in four months (mid - November 2025) of this fiscal year.
The y-o-y wholesale price inflation stood at 3.92 percent in mid-April 2026 compared to 4.20 percent a year ago. The y-o-y wholesale price inflation of consumption goods decreased 5.60 percent while intermediate goods and capital goods stood at 9.95 percent and 4.14 percent respectively. The y o-y wholesale price index of construction material increased 1.97 percent in the review month.
Import and Export
During the nine months of 2025/26, merchandise exports increased 18.5 percent to Rs.222.94 billion compared to a growth of 65.2 percent in the same period of the previous year. Destination wise, exports to India and other countries increased 22.6 percent and 5.1 percent respectively whereas exports to China decreased 46.8 percent. Exports of soyabean oil, cardamom, palm oil, jute goods, and noodles among others increased whereas exports of zinc sheet, particle board, tea, woolen carpet and handicraft goods among others decreased in the review period.
Meanwhile, merchandise imports for the nine months of 2025/26, merchandise imports increased 13.8 percent to Rs.1490.50 billion compared to a growth of 12.2 percent a year ago. Destination-wise, imports from India, China, and other countries increased 7.8 percent, 21.3 percent, and 24.2 percent respectively. Imports of chemical fertilizer, crude soyabean oil, silver, transport equipment, vehicle and spare parts and petroleum products among others increased whereas imports of edible oil, hot rolled sheet in coil, garlic, pulses and M.S. billet among others decreased in the review period.
Total trade deficit increased 13.0 percent to Rs.1267.56 billion during the nine months of 2025/26. Such a deficit had increased 6.4 percent in the corresponding period of the previous year. The export-import ratio increased to 15.0 percent in the review period from 14.4 percent in the corresponding period of the previous year
Services and Remittance
Net services income remained at a deficit of Rs.67.54 billion during the review period. Such income had a deficit of Rs.67.45 billion in the same period of the previous year.
Remittance inflows increased 39.1 percent to Rs.1659.41 billion in the nine months of 2025/26 compared to an increase of 10.2 percent in the same period of the previous year. During mid- March to mid-April (Chaitra month), remittance inflows stood at Rs. 209.75 billion. In the same period of the previous year, such inflows were Rs. 139.54 billion.
Inter-bank Transaction
In the review period, interbank transactions of the BFIs amounted Rs.892.21 billion on a turnover basis, including Rs.749.01 billion among commercial banks and Rs.143.20 billion among other financial institutions (excluding transactions among commercial banks). In the corresponding period of the previous year, such transaction was Rs.1,512.12 billion, including Rs.1,363.81 billion among commercial banks and Rs.148.31 billion among other financial institutions.
Price of Oil and Gold
The price of oil (Crude Oil Brent) in the international market increased 84.5 percent to US dollar 123.28 per barrel in mid-April 2026 from US dollar 66.83 per barrel a year ago. The price of gold increased 46.2 percent to US dollar 4722.65 per ounce in mid-April 2026 from US dollar 3230.50 per ounce a year ago.
Foreign Exchange Reserves and Adequacy Indicator
Gross foreign exchange reserves increased 30.5 percent to Rs.3494.73 billion in mid-April 2026 from Rs.2677.68 billion in mid-July 2025. In US dollar terms, the gross foreign exchange reserves increased 20.8 percent to 23.55 billion in mid-April 2026 from 19.50 billion in mid-July 2025.
Of the total foreign exchange reserves, the reserves held by NRB increased 27.7 percent to Rs.3082.41 billion in mid-April 2026 from Rs. 2414.64 billion in mid-July 2025. Reserves held by banks and financial institutions (except NRB) increased 56.8 percent to Rs.412.32 billion in mid-April 2026 from Rs.263.04 billion in mid-July 2025. The share of Indian currency in total reserves stood at 20.4 percent in mid-April 2026.
Based on the imports of the nine months of 2025/26, the foreign exchange reserves of the banking sector is sufficient to cover the prospective merchandise imports of 21.8 months, and merchandise and services imports of 18.4 months. The ratio of reserves-to-GDP, reserves-to-imports and reserves-to-M2 stood at 57.2 percent, 153.1 percent, and 41.2 percent respectively in mid-April 2026. 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 7.5 percent in mid-April 2026 from mid-July 2025. It had depreciated 2.9 percent in the same period of the previous year. The buying exchange rate per US dollar stood at Rs.148.07 in mid-April 2026, compared to Rs.137 in mid-July 2025.
Nepal Government Expenditure and Revenue
According to the Ministry of Finance, Financial Comptroller General Office (FCGO), the total expenditure of the Nepal Government stood at Rs. 1059.95 billion during the nine months of 2025/26. Recurrent expenditure, capital expenditure, and financial expenditure amounted to Rs. 747.52 billion, Rs. 96.20 billion, and Rs. 216.23 billion, respectively, during the review period.
Cash Balance of Government
Cash Balance at various accounts of the GoN maintained with NRB remained Rs. 429.17 billion (including Provincial Governments and Local Government Account) in mid-April 2026. Such a balance was Rs. 137.78 billion in mid-July 2025.
Banking
Domestic credit decreased by 0.1 percent in the review period compared to an increase of 2.5 percent in the corresponding period of the previous year. On y-o-y basis, domestic credit increased by 3.4 percent in mid-April 2026.
Monetary sector's net claims on government decreased by 33.2 percent in the review period compared to a decrease of 21.2 percent in the corresponding period of the previous year. On y-o-y basis, such claims decreased by 18.7 percent in mid-April 2026.
Deposits at Banks and Financial Institutions (BFIs) increased by 8.5 percent (Rs.615.67 billion) reaching Rs.7,879.54 billion in the review period compared to an increase of 5.7 percent (Rs.368.47 billion) in the corresponding period of the previous year. On y-o-y basis, deposits at BFIs expanded 15.5 percent in mid-April 2026.
Private sector credit from the BFIs increased by 5.7 percent (Rs.311.95 billion) to Rs. 5,809.66 billion in the review period compared to an increase of 7.1 percent (Rs.361.03 billion) in the corresponding period of previous year. On y-o y basis, credit to the private sector from the BFIs increased by 6.9 percent in mid-April 2026.
Interest Rates
The average base rate of commercial banks, development banks and finance companies stood at 5.06 percent, 7.36 percent, and 7.48 percent, respectively, in mid-April 2026. The average base rate of commercial banks, development banks and finance companies were 6.29 percent, 8.34 percent, and 9.17 percent respectively in the corresponding month a year ago.
Balance of Payments
Balance of Payments (BOP) remained at a surplus of Rs.731.16 billion in the review period. Such surplus was Rs.346.23 billion in the previous year. In US Dollar terms, the BOP remained in a surplus of Rs. 5.10 billion in the review period, compared to a surplus of Rs. 2.55 billion in the same period of the previous year.
