Current account at deficit of Rs 207.41 billion

KATHMANDU: Rise in import bill and slow export growth have resulted in current account deficit.

As per the latest macroeconomic status update of the first nine months of 2020-21 released by Nepal Rastra Bank (NRB), the current account remained at a deficit of Rs 207.41 billion in the review period compared to a deficit of Rs 126.09 billion in the same period of the previous year.

The report shows that merchandise exports increased 20.2 percent to Rs 94.77 billion compared to an increase of 12.9 percent in the same period of the previous year while, merchandise imports increased 13.1 percent to Rs.1111.40 billion against a decrease of 7.5 percent a year ago.

Total trade deficit increased 12.5 percent to Rs.1016.63 billion in nine months of 2020/21. Such deficit had decreased 8.9 percent in the same period of the previous year. The export-import ratio increased to 8.5 percent in the review period from 8.0 percent in the same period of the previous year.

Meanwhile, remittance inflows increased 16.5 percent to Rs 729.02 billion in the review period against a decrease
of 4.2 percent in the same period of the previous year.

However, Balance of Payments (BoP) registered a surplus of Rs 42.54 billion in the review period as compared
to a surplus of Rs 36.61 billion in the same period of the previous year, as per the report.

The gross foreign exchange reserves increased 2.2 percent to Rs 1433.27 billion in mid-April 2021 from Rs 1401.84 billion in mid-July 2020.

Meanwhile, the year-on-year consumer price inflation stood at 3.1 percent in the ninth month of 2020/21 compared to 6.74 percent a year ago. Food and beverage inflation stood at 3.49 percent whereas non-food and service inflation stood at 2.79 percent in the review month.