First Five Months Macro Economic Indicators of FY 2025/26: Remittance Inflows Risen by 35.6%, Inflation at 1.63%

Nepal Rastra Bank, the central bank of Nepal, has unveiled the current macroeconomic and financial situation of Nepal based on Five months of data for FY 2025/26.

Overall

Nepal Rastra Bank estimated that the inflation remained at 1.63 percent on y-o-y basis. The gross foreign exchange reserves stood at Rs. 3201.47 billion. Such reserve remained 22.13 billion in USD terms. The reserve is sufficient to cover the prospective merchandise and services imports of 18.2 months.

The NEPSE index stood at 2601.62 in mid December 2025 compared to 2682.29 in mid-December 2024

Inflation

The y-o-y consumer price inflation stood at 1.63 percent in mid-December 2025 compared to 6.05 percent a year ago.

The y-o-y wholesale price inflation stood at 2.78 percent in mid-December 2025 compared to 6.52 percent a year ago. The y-o-y wholesale price inflation of consumption goods stood at 0.41 percent while intermediate goods and capital goods stood at 4.27 percent and 2.09 percent respectively. The y-o-y wholesale price index of construction material increased 4.52 percent in the review month.

Import and Export

During the five months of 2025/26, merchandise exports increased 58.2 percent to Rs.116.51 billion compared to a growth of 16.5 percent in the same period of the previous year. Destination-wise, exports to India and other countries increased 82.7 percent and 5.5 percent respectively whereas exports to China decreased 73.3 percent. Exports of soyabean oil, cardamom, palm oil, jute goods, and shoes and sandals among others increased whereas exports of zinc sheet, particle board, tea, woolen carpet and handicraft goods among others decreased in the review period.

During the five months of 2025/26, mercandise imports increased 15.8 percent to Rs.766.19 billion compared to a growth of 3.0 percent a year ago. Destination-wise, imports from India, China, and other countries increased 5.7 percent, 24.6 percent, and 40.8 percent respectively. Imports of crude soyabean oil, chemical fertilizer, gold, transport equipment, vehicle and spare parts, and silver among others increased whereas imports of hot rolled sheet in coil, garlic, edible oil, oil seeds and pulses products among others decreased in the review period.

Total trade deficit increased 10.5 percent to Rs.649.68 billion during the five months of 2025/26. Such a deficit had increased 1.5 percent in the corresponding period of the previous year. The export-import ratio increased to 15.2 percent in the review period from 11.1 percent in the corresponding period of the previous year.

Services and Remittance

Net services income remained at a deficit of Rs.36.54 billion during the review period. Such income had a deficit of Rs.26.67 billion in the same period of the previous year.

Remittance inflows increased 35.6 percent to Rs.870.31 billion in the five months of 2025/26 compared to an increase of 4.7 percent in the same period of the previous year. During mid November to mid-December (Mangsir month), remittance inflows stood at Rs. 183.18 billion. In the same period of the previous year, such inflows were Rs. 118.79 billion.

Inter-bank Transaction

In the review period, BFIs inter-bank transactions amounted Rs.417.00 billion on a turnover basis, including Rs.344.71 billion among commercial banks, and Rs.72.29 billion among other financial institutions (excluding transactions among commercial banks). In the corresponding period of the previous year, such transaction was Rs.687.36 billion, including Rs.608.55 billion among commercial banks and Rs.78.81 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 17.8 percent to US dollar 61.55 per barrel in mid-December 2025 from US dollar 74.89 per barrel a year ago. The price of gold increased 62.3 percent to US dollar 4315.85 per ounce in mid-December 2025 from US dollar 2659.05 per ounce a year ago.

Foreign Exchange Reserves and Adequacy Indicator

Gross foreign exchange reserves increased 19.6 percent to Rs.3201.47 billion in mid-December 2025 from Rs.2677.68 billion in mid-July 2025. In the US dollar terms, the gross foreign exchange reserves increased 13.5 percent to 22.13 billion in mid-December 2025 from 19.50 billion in mid-July 2025.

Of the total foreign exchange reserves, the reserves held by NRB increased 18.7 percent to Rs.2866.47 billion in mid-December 2025 from Rs. 2414.64 billion in mid-July 2025. Reserves held by banks and financial institutions (except NRB) increased 27.4 percent to Rs.335 billion in mid-December 2025 from Rs.263.04 billion in mid-July 2025. The share of Indian currency in total reserves stood at 22.2 percent in mid-December 2025.

Based on the imports of the five months of 2025/26, the foreign exchange reserves of the banking sector is sufficient to cover the prospective merchandise imports of 21.7 months, and merchandise and services imports of 18.2 months. The ratio of reserves-to-GDP, reserves-to-imports and reserves-to-M2 stood at 52.4 percent, 151.9 percent, and 39.4 percent respectively in midDecember 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 5.1 percent in mid-December 2025 from mid-July 2025. It had depreciated 1.5 percent in the same period of the previous year. The buying exchange rate per US dollar stood at Rs.144.37 in mid-December 2025 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. 564.46 billion during the fifth month of 2025/26. The recurrent expenditure, capital expenditure, and financial expenditure
amounted to Rs. 398.05 billion, Rs. 33.87 billion, and Rs. 132.54 billion, respectively, in the review period.

Cash Balance of Government

Cash Balance at various accounts of the GoN maintained with NRB remained Rs.253.02 billion (including Provincial Governments and Local Government Account) in mid-December 2025. Such a balance was Rs. 130.73 billion in mid-July 2025.

Banking

Domestic credit decreased 0.4 percent in the review period compared to an increase of 1.6 percent in the corresponding period of the previous year. On y-o-y basis, domestic credit increased 4.1 percent in mid-December 2025.

Monetary sector's claims on the private sector increased 2.6 percent in the review period compared to an increase of 4.5 percent in the corresponding period of the previous year. On y-o-y basis, such claims increased 6.2 percent in mid-December 2025.

Deposits at Banks and Financial Institutions (BFIs) increased 3.9 percent (Rs. 281.89 billion) reaching Rs.7,545.77 billion in the review period compared to an increase of 2.7 percent (Rs.172.32 billion) in the corresponding period of the previous year. On y-o-y basis, deposits at BFIs expanded 13.9 percent in mid-December 2025.

Private sector credit from BFIs increased by 1.9 percent (Rs.102.24 billion) reaching Rs. 5,599.95 billion in the review period compared to an increase of 3.5 percent (Rs.178.29 billion) in the corresponding period of previous year. On y-o-y basis, credit to the private sector from BFIs increased 6.6 percent in mid-December 2025.

Interest Rates

The average base rate of commercial banks, development banks and finance companies stood 5.38 percent, 7.60 percent, and 8.19 percent respectively in the fifth month of 2025/26. The average base rate of commercial banks, development banks and finance
companies were 6.82 percent, 8.65 percent, and 9.77 percent respectively in the corresponding month a year ago.

Balance of Payments

Balance of Payments (BOP) remained at a surplus of Rs.421.89 billion in the review period. Such surplus was Rs.225.34 billion in the previous year. In the US Dollar terms, the BOP remained at a surplus of Rs.2.98 billion in the review period compared to a surplus of Rs. 1.68 billion in the same period of the previous year.