Nepal Rastra Bank (NRB) recently published the current Macroeconomic and financial situation of Nepal. There are some major highlights of the Nepal Economy are provided. Banking Exam Preparation Special.
Major Highlights
Inflation remained 3.49 percent on y-o-y basis.
Imports decreased 19.6 percent and exports increased 8.9 percent.
Remittances increased 23.0 percent.
Balance of Payments remained at a surplus of Rs.51.46 billion.
Gross foreign exchange reserves stood at USD 12.02 billion.
Federal Government spending amounted to Rs.1.95 billion and revenue collection Rs.58.81 billion.
Broad money (M2) expanded 0.3 percent. On y-o-y basis, M2 expanded 18.9 percent.
Deposits at BFIs and claims on private sector broadly remain same at the level of mid-July 2020. However, on y-o-y basis, deposits increased 19.0 percent and claims on private sector 11.3 percent.
Liquidity Management
1.In the review period, NRB mopped up Rs. 60 billion liquidity through reverse repo auction on a
cumulative basis. Rs.30 billion liquidity was mopped up in the corresponding period of the previous
year. Rs. 3.3 billion liquidity was injected through standing liquidity facility (SLF) in the
corresponding period of the previous year.
2.In the review period, NRB injected liquidity of Rs.52.19 billion through the net purchase of USD
435.7 million from foreign exchange market. Liquidity of Rs.20.11 billion was injected through the
net purchase of USD 178.6 million in the corresponding period of the previous year.
3.The NRB purchased Indian currency (INR) equivalent to Rs.38.37 billion through the sale USD 320
million in the review period. INR equivalent to Rs.46.81 billion was purchased through the sale of
USD 420 million in the corresponding period of previous year.
Monetary Situation
Money Supply
1.Broad money (M2) expanded 0.3 percent in the review period compared to the contraction of 0.4 percent in the corresponding period of the previous year. On y-o-y basis, M2 expanded 18.9 percent in mid-August 2020.
2.The net foreign assets (NFA after adjusting foreign exchange valuation gain/loss) increased Rs. 51.46 billion (3.9 percent) in the review period compared to an increase of Rs.6.05 billion (0.6 percent) in the corresponding period of the previous year.
Fiscal Situation
Federal Government
Fiscal Deficit/Surplus
1.In the first month of 2020/21, fiscal position of the Government, based on banking transactions,
remained at a surplus of Rs.58.93 billion compared to a surplus of Rs.76.97 billion in the
corresponding period of the previous year.
Expenditure and Revenue
2.In the review period, total expenditure of the federal government based on banking transactions
(excluding direct payments and unrealized cheques) stood at Rs.1.95 billion. Such expenditure was
Rs.2.62 billion in the corresponding period of the previous year.
3.In the review period, revenue collection based on banking transactions (including the amount to be
transferred to provincial and local governments) stood at Rs.58.81 billion. Total government revenue
was Rs.77.53 billion in the corresponding period of the previous year.
Cash Balance
4.Balance at various accounts of the GoN maintained with NRB remained Rs.196.56 billion (including
Provincial government and Local Authorities Account) in mid-August 2020.
Provincial Government
5.In the first month of 2020/21, total resource mobilization of provincial governments was Rs.8.05
billion. In this period, the federal government has transferred Rs.4.02 billion as grants and revenue
from divisible fund to provincial governments. During this period, provincial governments have
mobilized the resource of Rs.4.03 billion from revenue and other receipts.