NRB has released the economic and financial status report

The Nepal Rastra Bank (NRB) has released the economic and financial status report for the first month of the current fiscal year 2081/82 (July 2024). The report, published on Thursday, provides insights into the country's inflation, foreign exchange reserves, credit flows, and other key economic indicators.

• Inflation: The Consumer Price Index (CPI) based inflation stood at 4.10% on an annual point-to-point basis.

  • Inflation in the food and beverage group was 6.17%, while inflation in the non-food and service group was 2.94%.

  • The highest increase was observed in the vegetable sub-group, which surged by 19.07%.

• Foreign Exchange Reserves:

  • By the end of July, total foreign exchange reserves reached USD 15.58 billion (NPR 2.092 trillion).

  • There was a 2% increase in foreign exchange reserves within a month.

• Remittance Inflows:

  • Remittance inflows in Nepali Rupees increased by 18.0%.

• Credit Flow:

  • Credit extended to the private sector by banks and financial institutions increased by NPR 14.11 billion (0.3%) by the end of July.

  • On an annual basis, credit flow increased by 6.2%.

• Foreign Exchange Reserves Distribution:

  • Out of the total foreign exchange reserves, NPR 1.8342 trillion is held by NRB.

  • Banks and financial institutions (excluding NRB) hold NPR 208.79 billion in foreign exchange reserves.

• Sectoral Credit Flow:

  • There was an increase in credit flow to agriculture, industrial production, transportation, communication, and service industries.

  • However, credit flow to the construction and wholesale and retail trade sectors declined.

• Total Imports and Exports:

  • Imports decreased by 0.6%, while exports fell by 9.6%.

• Financial Stability:

  • The balance of payments stood at a surplus of NPR 40.90 billion.

• Inflation Analysis by Region:

  • Inflation in rural areas increased by 4.28%, while in urban areas, it rose by 4.03%.

  • Provincial inflation: Sudurpaschim Province recorded the highest inflation at 6.69%, while Koshi Province saw a 4.61% increase.

The data released by the NRB indicates that inflation in Nepal is under control. Although inflation in the food and beverage group remains high, the lower increase in the non-food group has kept overall inflation at 4.10%. Improvements were seen in foreign exchange reserves, remittance inflows, and credit flow. However, challenges persist with declining exports and reduced credit flow to the construction and trade sectors.