According to the "Current Macroeconomic and Financial Situation of Nepal," report published by the Nepal Rastra Bank's Economic Research Department, the country's economy is showing mixed signals based on eight months' data ending mid-March, 2022/23.
One of the major highlights of the report was that the CPI-based inflation remained at 7.44 percent on a year-on-year basis. Imports decreased by 19.1 percent, exports decreased by 29.1 percent, and the trade deficit decreased by 17.9 percent.
On the other hand, remittances increased by 25.3 percent in NPR terms and 14.8 percent in USD terms. Additionally, the balance of payments remained at a surplus of Rs.148.11 billion. Gross foreign exchange reserves stood at NPR 1401.21 billion and 10.69 billion in USD terms.
The report also stated that the Federal Government expenditure amounted to Rs.779.23 billion and revenue collection Rs.582.77 billion. Broad money (M2) increased by 5.3 percent, while on a year-on-year basis, M2 increased by 9.1 percent. Deposits at BFIs increased by 5.5 percent, and private sector credit increased by 4.6 percent. On a year-on-year basis, deposits increased by 10.5 percent, and private-sector credit increased by 3.1 percent.
The report indicates that Nepal's economy is facing both challenges and opportunities in the current economic scenario. While the country is experiencing a decrease in imports and a decrease in the trade deficit, it is also seeing a decline in exports. Nevertheless, the increase in remittances and the surplus balance of payments have provided some support to the economy.
Nepal Rastra Bank Governor Announces Strong and Safe Condition of Banks and Financial Institutions in Nepal
In a press conference held on Tuesday, Nepal Rastra Bank's Governor Maha Prasad Adhikari announced that the condition of banks in Nepal is safe and healthy. According to the Governor, all the financial institutions in Nepal have strong statistics, and there is no problem due to a lack of liquidity in banks and financial institutions.
The Governor also credited the increase in electronic payment infrastructure for the rise in e-payments and encouraged the general public to continue using e-payment devices for payment transactions. He further stated that the National Bank has strong policies in place to ensure the safety of banks and financial institutions.
Governor Adhikari expressed confidence that the economy will improve in the coming days and called on banks, businessmen, and industrialists to work with high morale. He emphasized that the financial sector and institutions are safe and secure, and there is no risk to them with a small shock.
The announcement by the Governor is likely to provide reassurance to the public and the business community that the financial system in Nepal is in good shape despite the ongoing COVID-19 pandemic. The statement is also expected to help boost confidence in the economy and encourage investment and growth in the financial sector.
