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While Nepal spends a huge amount of its foreign exchange on import bills yearly, foreign education and abroad travel have emerged as the other major areas where the country's hard-earned foreign currency is being spent. According to the latest macroeconomic report of Nepal Rastra Bank (NRB), Nepalis have spent Rs 51.44 billion in the first six months of the current fiscal year 2022/23 for foreign education and abroad travel. The amount spent by Nepalis for these two purposes is much higher than the country's tourism income during the same period. Foreign tourists spent as much as Rs 28 billion in Nepal in the first half of the current fiscal year. Nepalis have been going for study abroad which has resulted in growing spending. Nepalis spent as much as Rs 67.70 billion for education abroad in the last fiscal year 2021/22 which had surged due to suppressed spending in the previous two fiscal years due to Covid-related restrictions. In FY 2020/21 and FY 2019/20, spending for education decreased to Rs 24.95 billion and Rs 25.81 billion, according to the NRB. Likewise, Nepalis are spending heavily on traveling to other countries as tourists. According to NRB data, as much as Rs 16 billion was spent on foreign travels during the first six months of the current fiscal year. Nepalis spent around Rs 30 billion traveling to foreign destinations in FY 2021/22 which is close to the country's tourism earnings of Rs 32.44 billion. “Partial spending by Nepali migrant workers in foreign exchange is also included in this expenditure,” said a senior NRB official. “Nepalis are spending large amounts of foreign exchanges for travels abroad for different purposes in recent years,” said the NRB official. “As Nepal is an open economy, we cannot control such spending.” Nepalis spent as much as Rs 97.32 billion in the last fiscal year 2021/22 for travels abroad both for visiting foreign destinations and studying abroad which is triple the amount the country earned from foreign travelers. Nepal earned as much as Rs 32.44 billion from foreign visitors in the last fiscal year. Nepal’s tourism earnings were battered by travel curbs after the Covid-19 pandemic which has been recovering lately. The country earned only Rs 7.26 billion from foreign tourists in the fiscal year 2020/21, according to NRB. But the country’s tourism is reviving which is clearly indicated by the growth in foreign visitors in 2022. Nepal welcomed 614,148 foreign tourists in 2022, a sharp rise from 149,833 in 2021, according to Department Immigration data. In January, 55,074 foreign visitors visited the country. Nepal has targeted to welcome one million foreign tourists in 2023. “As international travel has become easier, more tourists are expected to visit Nepal in 2022 and we can hope foreign currency earnings to rise,” said the NRB official.   RISING TRAVEL SPENDING

The price of gold has increased by Rs 100 per tola in the domestic market on Thursday. According to the Federation of Nepal Gold and Silver Dealers’ Association, the precious yellow metal is being traded at Rs 104, 900 per tola today. The gold was traded at Rs 104, 800 per tola on Wednesday. Meanwhile, tejabi gold is being traded at Rs 104, 400 per tola. It was traded at Rs 104, 300 per tola. Similarly, the price of silver has increased by Rs 5 and is being traded at Rs 1,320 per tola today.

The Nepal Stock Exchange (NEPSE) plunged by 7. 16 points to close at 2,170. 18 points on Wednesday. Similarly, the sensitive index dropped by 0. 87 points to close at 414. 00 points. A total of 10,502,649 unit shares of 257 companies were traded for Rs 3. 69 billion. Meanwhile, Terhathum Power Company Limited was the top gainer today with its price surging by 3. 32 percent. Likewise, Adarsha Laghubitta Bittiya Sanstha Limited was the top loser with its price dropped by 5. 14 percent. At the end of the day, the total market capitalization stood at Rs 3. 13 trillion.

With the Nepal Rastra Bank (NRB) tightening business refinancing that the central banks arranged for the enterprises affected by the Covid-19 pandemic in 2020, there has been a sharp drop in outstanding refinance facilities. During the first six months of the current fiscal year 2022/23, the central bank has reduced outstanding refinance facilities by more than Rs 100 billion. According to NRB, the outstanding refinance facility as of mid-January of this fiscal year stood at Rs 11.75 billion from as high as Rs 111.96 billion in mid-July 2022. Such a drop in business refinancing occurred after the central bank reduced the scope of providing refinance facilities through the monetary policy 2022/23. As per the monetary policy for the current fiscal year 2022/23, the refinance facility will be continued but will be limited to productive sectors including agriculture, small enterprises, exports, and the sectors still affected by the pandemic. “Such facility will be gradually reduced to the amount available in the refinance fund by mid-July 2024,” reads the monetary policy. NRB adopted the policy citing the use of the cheaper credit received under refinance facility in importing goods which led to depletion of foreign exchange reserves. A senior NRB official said that the refinance facility has now come down more or less to the levels of normal times. Before the central bank announced the refinance facility for the businesses hit by Covid-19 through the monetary policy 2020/21, borrowers used to avail limited business refinancing. The outstanding amount of refinancing provided by the central bank stood at Rs 7.49 billion in mid-July 2020. Of which, the general refinance is Rs 5.88 billion, and refinance to earthquake victims was worth Rs 1.61 billion. With the COVID-19-related closure of businesses hitting most businesses hard, the central bank announced a massive refinance package of over Rs 200 billion to revive the businesses. It approved a refinance facility of Rs 148.75 billion during the fiscal year 2020/21. The outstanding amount of refinancing provided by NRB remained at Rs 122.70 billion in mid-July 2021, according to central bank statistics. As many as 48,890 borrowed benefited from the package in that fiscal year, the NRB said. The large package of refinance facilities was continued in the fiscal year 2021/22 too. The central bank approved the business refinancing of Rs 115.70 billion in the fiscal year, benefiting as many as 24,305 borrowers. Because of cheaper interest rates, people tended to receive refinance packages. The specified sectors including export and sick industry received such facilities at three percent while micro, small, and medium enterprises at five percent. All other businesses received the facility at a five percent interest rate. The central bank officials admitted time and again that this flexible policy to revive the Covid-affected businesses was misused to divert funds to other purposes including procuring real estate and financing imports. With the country’s imports surging, gross foreign exchange reserves decreased by 13.1 percent to Rs 1,215.80 billion in mid-July 2022 from Rs 1399.03 billion in mid-July 2021. Fears spread about the country heading in the direction of Sri Lanka and the government imposed an import ban on certain products including vehicles in April last year.