Saturday 23rd October 2021

How much foreign reserves does Nepal have ?


Published on : 12 February, 2021 10:27 am

Kathmandu : Foreign reserves of any country are paid for goods and services imported into that country.

When there is a reserve to support the country’s imports, it becomes easier for the country to import. At present, Nepal has a total foreign exchange reserve of Rs. 1493.75 billion. This reserve is for 6 months of the current fiscal year i.e. till mid-December.

Foreign exchange reserves increased by 6.6 percent, according to NRB data. As of last July, such reserves stood at Rs. 1401.84 billion. In US dollar terms, such reserves increased by 9.7 percent to Rs. 12.78 billion in mid-January 2077 from Rs. 11.65 billion in mid-July 2077.

Out of the total foreign exchange reserves, the reserves with NRB increased by 7.5 percent to Rs. 1318.66 billion in mid-January 2012/13 from Rs. 1226.12 billion in mid-July 2012/13. Foreign exchange reserves of banks and financial institutions (excluding NRB) decreased by 0.4 percent to Rs. 175.09 billion in mid-January 2012/13 from Rs. 175.71 billion in mid-July 2012/13. The Indian currency accounted for 23.7 percent of the total foreign exchange reserves in the fiscal year 2077 BS.

These are reserve adequacy indicators :

Based on the six months import of FY 2077/78, the foreign exchange reserves of the banking sector will be sufficient to support 13.9 months import of goods and 12.6 months import of goods and services.

The ratios of foreign exchange reserves to GDP, total imports and broad money supply during this period were 39.7 percent, 105.2 percent and 32.2 percent respectively. As of mid-July 2077, these ratios were 37.2 percent, 105.7 percent and 33.1 percent respectively.

What is foreign exchange reserves ?

According to the Foreign Exchange Act 2019, ‘foreign exchange’ means foreign currency, all types of deposits paid or received in foreign currency, loans, inventories, foreign securities and checks, drafts, travelers checks, electronic funds in foreign currency.

Transfers, credit cards, letters of credit, bills of exchange, affidavits should be remembered and the term refers to any other monetary instrument specified by the bank for publishing and broadcasting public information. Similarly, foreign exchange trading refers to the act of buying and selling foreign exchange, borrowing, lending or in any other way taking foreign exchange, giving and the term also refers to the act of approving a foreign exchange.

Things to pay attention :

No one can trade foreign currency without the approval of the National Bank. It is not possible to trade foreign currency in the country. There is an arrangement to trade only in Nepali currency by exchanging all foreign currencies including Indian currency. When exchanging foreign currency, transactions should be done only from an approved company. Otherwise, NRB may punish.

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