Nepal spent $ 2.04 billion to buy Indian currency to finance imports in the first six months of the current fiscal year – myRepublica
KATMANDU, February 16: Nepal bought Indian rupees worth 241.31 billion rupees by selling US dollars to finance imports from the neighbor to the south in the first six months of the fiscal year, against 229.55 billion rupees in the same period of the previous fiscal year.
According to the Nepal Rastra Bank (NRB), the country spent US $ 2.04 billion to purchase the aforementioned amount of Indian rupees between mid-July of last year and mid-January of this year. To this end, a total of $ 2.02 billion was discharged during the review period last year.
Almost every year the country has to spend a large amount of US dollars to purchase Indian currency due to the ever increasing volume of imports from the neighbor to the south, many of which are luxury items.
Nepal now has a foreign currency cushion with a balance of payments surplus of Rs 124.92 billion, which will be sufficient to finance imports of goods and services for more than 12 months. Of the total income, a large portion of US dollars is received through remittances, while the foreign exchange income from tourism income and foreign direct investment is very low.
During the period under review, the country’s overall trade deficit narrowed by 5.8% to Rs 600.45 billion, however, government authorities found it difficult to manage the Indian currency due to soaring spending on import. According to the Trade and Export Promotion Center, Nepal’s import spending to India rose 3.5% to 438.83 billion rupees, compared with an 8.4% growth in export earnings from the neighbor. South, which amounted to only 43.5 billion rupees.