While the Country Battles with Second Wave of Pandemic, NRB Summarizes Nepal's Performance In 9 Months of This Fiscal Year

The central bank has published macro-economic data based on the first nine month's data of FY 2077/78. The report covers major details on inflation, trade, services, remittance, BOP position, foreign exchange reserves, fiscal deficit, surplus, expenditure, revenue, money supply, deposit, credit liquidity, interest rates, and the capital market.

Some of the major highlights from the reports are:

Inflation: The y-o-y consumer price inflation stood at 3.10 percent in the ninth month of 2020/21 compared to 6.74 percent a year ago. Food and beverage inflation stood at 3.49 percent whereas non-food and service inflation stood at 2.79 percent in the review month.

Import and export: During the nine months of 2020/21, merchandise exports increased 20.2 percent to Rs.94.77 billion compared to an increase of 12.9 percent in the same period of the previous year. Destination-wise, exports to India and other countries increased 23.5 percent and 14.5 percent respectively whereas exports to China decreased 27.3 percent. Exports of soyabean oil, cardamom, jute goods, polyester yarn and threads, pashmina, among others, increased whereas exports of palm oil, pulses, zinc sheet, wire, cattle feed, among others, decreased in the review period.

During the nine months of 2020/21, merchandise imports increased 13.1 percent to Rs.1111.40 billion against a decrease of 7.5 percent a year ago. Destination-wise, imports from India and China increased 20.3 percent and 7.7 percent respectively whereas imports from other countries decreased 2.3 percent. Imports of transport equipment & parts, crude soyabean oil, M.S. billet, rice, telecommunication equipment, and parts, among others, increased whereas imports of aircraft spare parts, petroleum products, crude palm oil, video television and parts, silver, among others, decreased in the review period.

Services: Net services income remained at a deficit of Rs.49.13 billion in the review period compared to a deficit of Rs.1.08 billion in the same period of the previous year.

Remittance: Remittance inflows increased 16.5 percent to Rs.729.02 billion in the review period against a decrease of 4.2 percent in the same period of the previous year. In US Dollar terms, remittance inflows increased 13.0 percent to 6.19 billion in the review period against a decrease of 4.9 percent in the same period of the previous year.

The number of Nepali workers (institutional and individual-new and legalized) taking approval for foreign employment decreased 66.7 percent in the review period. It had increased 10.2 percent in the same period of the previous year. The number of Nepali workers (Renew entry) taking approval for foreign employment decreased 55.7 percent in the review period. It had decreased 15.0 percent in the same period of the previous year.

BOP position: Balance of Payments (BOP) registered a surplus of Rs.42.54 billion in the review period as compared to a surplus of Rs.36.61 billion in the same period of the previous year. In the US Dollar terms, the BOP recorded a surplus of 348.1 million in the review period compared to a surplus of 321.0 million in the same period of the previous year.

Exchange rate: Nepalese currency vis-à-vis the US Dollar appreciated 0.5 percent in mid-April 2021 from mid-July 2020. It had depreciated 10.2 percent in the same period of the previous year. The buying exchange rate per US Dollar stood at Rs.119.80 in mid-April 2021 compared to Rs.120.37 in mid-July 2020.

Government expenditure and revenue: In the review period, the total expenditure of the federal government according to data of the Financial Comptroller General Office(FCGO), Ministry of Finance, stood at Rs.690.28 billion. The recurrent expenditure, capital expenditure, and financing expenditure amounted to Rs.526.97 billion, Rs.105.73 billion, and Rs.57.59 billion respectively in the review period.

In the review period, revenue mobilization (including the amount to be transferred to provincial and local governments) stood at Rs.683.87billion. The tax revenue and non-tax revenue amounted to Rs. 636.70 billion and Rs. 47.17 billion in the review period.

Banking:

- Deposit collection and Credit distribution: Deposits at Banks and Financial Institutions (BFIs) increased 13.7 percent in the review period compared to a growth of 9.7 percent in the corresponding period of the previous year. On a y-o-y basis, deposits at BFIs expanded 23.0 percent in mid-March 2021.

Private sector credit from BFIs increased 22.5 percent in the review period compared to a growth of 11.5 percent in the corresponding period of the previous year. On a y-o-y basis, credit to the private sector from BFIs increased 23.1 percent in mid-April 2021.

-Interest rates: The average base rate of commercial banks decreased to 6.90 percent in the ninth month of 2020/21 from 9.36 percent a year ago. The weighted average deposit rate and lending rate of commercial banks stood at 4.79 percent and 8.61 percent respectively in the review month. Such rates were 6.74 percent and 11.77 percent respectively a year ago.