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Nepal has received the highest monthly inflow of remittances in Chaitra (mid-March to mid-April). According to the latest macroeconomic report of the Nepal Rastra Bank (NRB), remittance inflow amounted to Rs 109.1bn last month. The country has been receiving monthly remittances above Rs 100bn for the last five months. With the surge in remittance inflow, the country's forex reserves, and balance of payment both have improved, said NRB. The central bank report shows a continuous improvement in the external sector of the economy. NRB officials say that the policy efforts of the government and the central bank implemented a year ago, aimed at controlling imports and credit expansion, have worked as expected. According to them, the challenge now is to maintain the pace of improvement. “Amid the growing problems in the external sector, the central bank introduced a tight monetary policy, a 100 percent margin provision while opening letters of credit (LC) while the government enforced import restrictions on 10 goods,” said Prakash Kumar Shrestha, Executive Director of NRB, “These measures helped us to avert a looming crisis. While the indicators are positive currently, we need to tread with caution.” According to the NRB report, Nepal’s balance of payment (BOP) is at a surplus of Rs 180.17bn in the first nine months of FY 2022/23 compared to a deficit of Rs 268.26bn in the same period of FY 2021/22. In US Dollar terms, BOP remained at a surplus of Rs 1.37bn in the review period compared to a deficit of 2.25bn in the same period of the last fiscal year. The country's forex reserves increased by 17.9 percent in the first nine months of the current fiscal year. The report said Nepal's forex reserves stood at Rs 1433.73bn in mid-April, 2023 from Rs 1215.8bn in mid-July 2022. In US dollar terms, the gross foreign exchange reserves increased by 14.8 percent to Rs 10.94 billion in mid-April 2023 from Rs 9.54 billion in mid-July 2022. In the report, NRB has stated that the current level of foreign exchange reserves is sufficient to cover merchandise imports for 11 months, and merchandise and services imports for 9.4 months. Meanwhile, continuously growing tourist arrivals helped the growth of the country’s tourism income by 94.3 percent. Nepal has earned Rs 44.17bn as tourism income in this fiscal year compared to Rs 22.73bn in the last fiscal year. Inflation resurges in Chaitra The NRB report shows consumer inflation has surged in Chaitra (mid-March to mid-April) compared to Falgun (mid-February to mid-March). Consumer inflation stood at 7.76 percent in Chaitra compared to 7.44 percent in Falgun. Food and beverage inflation stood at 6.93 percent whereas non-food and service inflation rose to 8.42 percent. Under the food and beverage category, the price of the restaurant & hotel sub-category increased by 14.68 percent, spices by 14.67 percent, cereal grains & their products by 13.72 percent, fruit by 11 percent, and tobacco products by 10.83 percent. Under the non-food and services category, the price of the health sub-category increased by 10.39 percent, housing and utilities by 9.54 percent, recreation and culture by 8.81 percent, furnishing and household equipment by 8.74 percent, and education by 8.67 percent.

The government is planning to extend the duration of survey licenses of power projects. The government has registered an amendment bill to the Nepal Electricity Act, 1992 at the House of Representatives with an arrangement that the duration could be extended by a maximum of two years in case of special circumstances. The amendment proposal was included in the Some Nepal Acts Amendment Bill registered at the house. As per the Nepal Electricity Act, 1992, the term of license to be issued for the survey of electricity can be of five years at maximum. “The duration of the survey license could be extended by a maximum of two years if the survey could not be carried out due to incidents like natural calamity, general strikes, and curfew,” the Amendment Bill states. The Department of Electricity Development (DoED) has so far issued survey licenses for 123 hydropower projects having a combined capacity of 12,351.929 MW. Similarly, DoED has issued survey licenses for 47 solar projects with a combined capacity of 1,248.59 MW. A senior DoED official said there is a need for an extension of the survey license duration in the situation of natural calamities and other crises such as the Covid-19 pandemic and major political upheavals that can disrupt the surveys. “We also felt the need to extend the survey license period for large storage-type hydropower projects,” the official said. “It takes enormous time to study large projects.” However, the DoED official said for smaller power projects and run-of-the-river (ROR) type projects, the existing five-year term of survey license is sufficient. Besides unavoidable circumstances, the government’s policy has also been hindering the efforts of completing the survey at the earliest date possible. “For example, license holders show no hurry to carry out surveys if a power purchase agreement (PPA) is not guaranteed,” the official said. For example, the Nepal Electricity Authority (NEA) halted the PPA signing with the developers of the run-of-the-river type projects for the last three years citing the financial risks for it while buying more power in the rainy season. In February, the state-owned power utility decided to sign a PPA with the developers of ROR projects under the ‘take or pay’ modality for up to 1,500 MW. NEA's decision came eight months after a Cabinet meeting directed the authority to do so. The extension of the survey license could, however, slow down the process of project development. “Genuine developers do not want to extend the duration of the survey license because of the high renewal fee,” the official said. A developer of a power project from 1MW to 5MW needs to pay Rs 1 million per year in licensing fees. Similarly, a developer of over 500 MW projects needs to pay Rs 6 million annually in fees.

The gold is being traded at Rs 111, 600 per tola in the domestic market on Thursday. According to the Federation of Nepal Gold and Silver Dealers’ Association, tejabi gold is being traded at Rs 111, 050 per tola. Similarly, the price of silver has dropped by Rs 15 and is being traded at Rs 1,430 per tola today.

The Nepal Stock Exchange (NEPSE) plunged by 2. 43 points to close at 1,841.93 points on Wednesday. Similarly, the sensitive index dropped by 0. 45 points to close at 353. 80 points. A total of 1,942,626-unit shares of 265 companies were traded for Rs 589 billion. Meanwhile, Himal Dolakha Hydropower Company Limited was the top gainer today with its price surging by 8. 24 percent. Likewise, NCC Debenture was the top loser with its price dropping by 5. 44 percent. At the end of the day, the total market capitalization stood at Rs 7. 24 trillion.