The Nepal Rastra Bank, the central bank of Nepal, has disclosed the current macroeconomic and financial state of Nepal based on data from the first six months ending mid-January 2023/24. The overall assessment reveals that inflation remained at 5.26% on a year-on-year basis, and the gross foreign exchange reserves reached USD 13.69 billion. Total imports decreased by 3.1%, exports by 7.2%, and the trade deficit by 2.6% during the period.
As of mid-January 2023, the outstanding concessional loan amounted to Rs. 155.40 billion, benefiting 133,174 borrowers. Notably, Rs. 104.73 billion was extended to 52,872 borrowers for selected commercial agriculture and livestock businesses, while Rs. 48.60 billion was loaned to 77,918 women entrepreneurs. The NEPSE index stood at 2120.62, a slight decrease from 2149.39 in mid-January 2023.
In terms of inflation, the year-on-year consumer price inflation moderated to 5.26% in mid-January 2024 compared to 7.26% a year ago. The merchandise exports decreased by 7.2% to Rs. 74.97 billion, with a notable decline in exports to India by 12.8%, while exports to China and other countries increased significantly. Merchandise imports decreased by 3.1% to Rs. 768.17 billion, and the total trade deficit decreased by 2.6% to Rs. 693.20 billion.
Services income remained at a deficit of Rs. 36.06 billion, while remittance inflows increased by 25.3% to Rs. 733.22 billion. Inter-bank transactions among financial institutions totaled Rs. 2574.20 billion. The price of oil in the international market decreased by 4.2%, and the price of gold increased by 5.6%.
Foreign exchange reserves increased by 18.0% to Rs. 1816.57 billion in mid-January 2024. The Nepalese currency depreciated by 0.91% against the US dollar. Government expenditure decreased by 1.7% to Rs. 566.62 billion, while revenue mobilization increased by 8.2% to Rs. 496.50 billion.
In the monetary sector, domestic credit increased by 2.6%, and deposits at Banks and Financial Institutions (BFIs) expanded by 6.6%. Private sector credit from BFIs increased by 4.0%. The average base rates of commercial banks, development banks, and finance companies stood at 9.35%, 11.49%, and 12.77% respectively.
The Balance of Payments (BOP) remained at a surplus of Rs. 273.52 billion, an increase from Rs. 92.15 billion in the same period of the previous year. In US Dollar terms, the BOP surplus was 2.06 billion compared to 697.4 million a year ago.