KATMANDU, September 2: Nepal bought Indian rupees (INR) equivalent to 535.23 billion rupees by selling US dollars to finance imports from the neighbor to the south in the last fiscal year.

Nepal Rastra Bank (NRB) records show that Nepal spent US $ 4.54 billion to purchase the aforementioned amount of INR last year. In 2019/20 Nepal spent US $ 3.82 billion to buy INR worth Rs 442.13 billion.

Almost every year, Nepal 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. The landlocked country depends mainly on the money sent by migrant workers to maintain its reserves of US dollars.

According to NRB, due to the widening trade deficit, with India in particular, the country’s spending in US dollars on this item jumped 19% last year. Out of total imports worth Rs 1.53 trillion, Nepal has paid import bills of Rs 971.60 billion to India alone.

With the depletion of a large amount of US dollars triggered by the surge in imports, Nepal’s balance of payments recorded a surplus of just 1.23 billion rupees in 2020/21, down from the surplus. from 282.41 billion rupees the previous year.

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