Net Foreign Assets Surge to Rs. 2.79 Trillion – What It Means for Stability

Nepal’s Net Foreign Assets (NFA) climbed sharply to Rs. 2.79 trillion by mid-August 2025, up from Rs. 2.64 trillion in mid-July, according to the Nepal Rastra Bank’s (NRB) latest data. This represents a 4.8% month-on-month increase, reflecting growing strength in Nepal’s external sector at a time when global uncertainties remain high.

The rise in NFA is mainly attributed to robust remittance inflows, which crossed Rs. 176 billion in a single month, alongside improved foreign exchange reserves that reached Rs. 2.95 trillion. Nepal’s import cover now stands at 20.4 months for goods and 16.6 months for goods and services, highlighting stronger external liquidity than in previous years.

Economists believe that a higher NFA level boosts exchange rate stability, reduces vulnerability to external shocks, and provides more room for monetary and fiscal policy flexibility. However, they caution that rising government debt repayments and continued dependence on remittances make the stability fragile in the long term.

With reserves-to-GDP climbing to 45.9% and reserves-to-imports ratio at 138.3%, Nepal has built one of the strongest cushions in recent years. The challenge ahead will be to diversify export earnings and attract foreign direct investment (FDI) to sustain this momentum beyond remittance inflows.