Kathmandu. The increase in remittances has strengthened the foreign exchange reserves. In the first five months of the current fiscal year 2082÷83, Nepal’s total foreign exchange reserves have increased to Rs 3,201.47 billion. The reserve with the government has shown the capacity to sustain the import of goods for about 22 months.

According to the Nepal Rastra Bank, the total foreign exchange reserve has increased by 19.6 percent as of mid-July 2082 from Rs 2,677.68 billion in mid-July 2082.

The foreign exchange reserves increased by 13.5 percent to US$ 22.13 billion as of mid-July 2082 from US$ 19.5 billion as of mid-July 2082.

Nepal Rastra Bank (NRB) has the largest share in the total foreign exchange reserve. The Reserve Bank of Nepal’s (NRB) reserves have increased by 18.7 per cent to Rs 2866.47 billion as of mid-July 2082 from Rs 2,414.64 billion in mid-July 2082.

Likewise, the foreign exchange reserve with banks and financial institutions other than Nepal Rastra Bank (NRB) has also increased significantly. Such reserves have increased by 27.4 percent to Rs 335 billion in mid-July from Rs 263.04 billion in mid-July 2018. The share of Indian currency in the total foreign exchange reserves is 22.2 percent.

Import not enough storage

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The Reserve Adequacy Index has shown that Nepal’s foreign exchange position is safe. Based on the imports up to five months of the fiscal year 2082÷83, the foreign exchange reserve with the banking sector is sufficient to sustain the import of goods for 21.7 months and goods and services for 18.2 months.

Similarly, the ratio of foreign exchange reserves to GDP is 52.4 percent, the ratio to total imports is 151.9 percent and the ratio to broad currency supply is 39 percent. It has reached 4 percent. These ratios were 43.8 percent, 12.1 percent and 34.1 percent respectively in mid-July 2018.