Nepal's External Economy Remains Robust with Record Surpluses

Kathmandu. Even after eight months of the current fiscal year 2082/83, Nepal's external economy remains in a very strong and resilient position. According to Nepal Rastra Bank data, both the balance of payments (BoP) and the current account, which measure the flow of money in and out of the country, have shown historic surpluses.

As of the end of Falgun, the country's balance of payments is in a surplus of 654.35 billion rupees. During the same period last year, the balance of payments was in a surplus of only 310.37 billion rupees.

Compared to the previous year, the balance of payments surplus has more than doubled this year. In terms of US dollars, the balance of payments, which was in a surplus of 2.29 billion in the first eight months of the previous year, has reached a surplus of 4.61 billion during the review period.

Similarly, the country's current account is also in a high surplus. During the review period, the current account is in a surplus of 552.45 billion rupees. By the end of Falgun of the previous fiscal year, this account was in a surplus of only 197.03 billion rupees.

In US dollars, the current account, which was in a surplus of 1.46 billion last year, has increased to a surplus of 3.48 billion this year. This wide surplus in both the balance of payments and the current account indicates that there is ample foreign currency liquidity in the economy and the risk of any immediate external crisis appears low. This position remains strong despite tensions in West Asia, which is the source of nearly 42 percent of remittances.

During this period, net capital transfers stood at 12.59 billion rupees, while net foreign direct investment inflows were 10.44 billion rupees. Overall, high remittances and a contraction in imports have brought the external sector to its most comfortable position to date.