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.