Weak rupee lowers export-import ratio

KATHMANDU: The export to import ratio has improved of late as the country’s export has started to look up.

The ratio of export to import stood at 13.8 per cent in the first five months of current fiscal year, as against 14.6 per cent in the same period a year ago, according to Nepal Rastra Bank (NRB)’s latest macroeconomic report.

The figure indicates that for every rupee of commodity exported from Nepal, the country is importing Rs 13.8 worth of goods from abroad.

Although ever widening trade deficit has always been a challenge for the economy, the last few months of the current fiscal year has witnessed that gap narrowing down. This is the impact of a stronger US dollar against Nepali rupee, which has boosted Nepali exports while reducing import growth. Nepali rupee depreciated by 4.1 per cent against the US dollar in between mid-July and mid-December. This caused trade deficit to widen at a slower pace of 21 per cent in the five-month period, as against 30.3 per cent in the same period last year.

Merchandise exports went up by 13.7 per cent to Rs 37.37 billion in the first five months of the current fiscal year. Such exports had increased by 9.4 per cent to Rs 32.88 billion in the same period a year ago. On a monthly basis also exports registered increment of 18.9 per cent in comparison to previous month.

The rate of import growth, on the other hand, remained slow, rising by 19.9 per cent to Rs 270.35 billion in the review period. Such imports had risen by 26.8 per cent to Rs 225.39 billion a year ago.

With improved trade statistics and remittance inflow, which surged by 35.3 per cent to Rs 221.18 billion in the five-month period, Nepal’s current account also recorded a surplus of Rs 50.35 billion during the review period. During the same period a year ago, current account surplus stood at Rs 50.35 billion.

(Source: THT)