The country’s BoP deficit plunged further to Rs 150.38 billion
KATMANDU, December 16: Nepal’s balance of payments (BoP) plunged further to negative 150.38 billion rupees in the first four months of the current fiscal year, thanks to falling transfer income and widening of the trade deficit.
According to the “Current Macroeconomic and Financial Situation of Nepal” released Wednesday by the Nepal Rastra Bank (NRB), the country’s BoP was in surplus of 110.65 billion rupees in mid-July and mid-November during the year. last exercise. NRB records show that the BoP figure fell further to around Rs 74 billion in one month between mid-October and mid-November.
The BoP records a country’s financial transactions with the rest of the world under three sub-headings: current account, capital account and financial account. It is a major indicator to show the net balance of a country in terms of foreign currency reserves.
According to NRB, the current account deficit in mid-November amounted to Rs 223.19 billion, down directly from Rs 151.70 billion the previous month. While the country’s remittances fell 7.5% to Rs 312.42 billion, the trade deficit widened by 56.8% to Rs 568.17 billion. Similarly, the net income from services also remained in deficit at Rs 31.20 billion.
In terms of the capital account, capital transfers decreased by 39.3% to 2.52 billion rupees while net foreign direct investment increased by 77% to 6.63 billion rupees.
With large outflows of foreign currency amid the slow growth of the country’s income from overseas, Nepal’s foreign exchange reserves declined 10.9 percent to $ 10.47 billion. The amount now allows the landlocked country to finance imports of only 7.9 months.
NRB records show that Nepal faces a free fall in its ability to purchase foreign goods every consecutive month due to the worsening BoP deficit. By mid-October, the foreign exchange reserve was sufficient to handle imports for 8.6 months.