Foreign Exchange Reserves Decline by 13.2 Percent: NRB

January 14, 2022 | Investopaper

The gross foreign exchange reserves decreased 13.2 percent to Rs.1214.03 billion in mid-December 2021 from Rs.1399.03 billion in mid-July 2021. In the US Dollar terms, the gross foreign exchange reserves decreased 14.7 percent to 10.03 billion in mid-December 2021 from 11.75 billion in mid-July 2021.

Of the total foreign exchange reserves, reserves held by NRB decreased 12.9 percent to Rs.1084.64 billion in mid-December 2021 from Rs.1244.63 billion in mid-July 2021. Reserves held by banks and financial institutions (except NRB) decreased 16.2 percent to Rs.129.40 billion in mid-December 2021 from Rs.154.39 billion in mid-July 2021. The share of Indian currency in total reserves stood at 25.1 percent in mid-December 2021.

Exports & Imports

During the five months of 2021/22, merchandise exports increased 105.6 percent to Rs.102.92 billion compared to an increase of 5.1 percent in the same period of the previous year. Destination-wise, exports to India and other countries increased 138.0 percent and 28.5 respectively whereas exports to China decreased 1.4 percent. Exports of palm oil, soyabean oil, oil cakes, polyster yarn & thread, jute goods, among others, increased whereas exports of cardamom, tea, zinc sheet, wire, copper wire rod, among others, decreased in the review period.

Similarly, during the five months of 2021/22, merchandise imports increased 59.5 percent to Rs.838.41 billion against a decrease of 9.6 percent a year ago. Destination-wise, imports from India, China and other countries increased 44.6 percent, 57.8 percent, and 111.2 percent respectively. Imports of petroleum products, crude palm oil, medicine, transport equipment, vehicle and other parts, crude soyabean oil, among others, increased whereas imports of cement, pulses, molasses sugar, insecticides, tobacco, among others, decreased in the review period.

Based on customs points, exports from Kanchanpur, Mechi and Nepalgunj Customs Offices decreased whereas exports from all the other customs points increased in the review period. On the import side, imports from all the major customs points increased in the review period. Total trade deficit increased 54.7 percent to Rs.735.49 billion during the five months of 2021/22. Such a deficit had contracted 10.9 percent in the corresponding period of the previous year. The export-import ratio increased to 12.3 percent in the review period from 9.5 percent in the corresponding period
of the previous year.

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