KATHMANDU, JUL 26 - 2012
Nepal’s gross foreign exchange reserves surged 56.9 percent to Rs 427.01 billion in the first 11 months of FY 2011-12 compared to a year ago, according to the macro-economic report released by the Nepal Rastra Bank (NRB) on Wednesday. The figure was at Rs 272.15 billion as of mid-July 2011.
Based on the import trend, the current level of forex reserves is sufficient to finance merchandise imports for 11.4 months and merchandise and service imports for 10.1 months.
Even more encouraging was the overall Balance of Payments (BoP) situation. The country’s BoP recorded its highest ever surplus of Rs 113.22 billion over the review period compared to a deficit of Rs 335.6 million a year ago.
Likewise, the current account posted a surplus of Rs 61.56 billion, against a deficit of Rs 14.69 billion in previous year.
“The substantial growth of remittances and the improvement in the service account were the responsible factors for the substantial surplus in the current account,” read the report.
In US dollar terms, the BoP surplus stands at $1.41 billion and the current account surplus at $747.9 million.
Although stronger dollar boosted the BoP surplus, it was also instrumental in pushing up inflation to near double-digit level. According to the report, the year-on-year consumer inflation jumped to 9.9 percent as of the 11th month of the last fiscal year from 8.7 percent in the 10th month.
A sharp rise in the price index of food and beverage group last month contributed for more than a percentage increase in the overall inflation. Over the review
period, indices of both food and beverage and non-food and services groups increased by 9.9 percent. There has been sharp rise in the prices of vegetables, ghee and oil, milk products, meat and fish, according to NRB. The price index of vegetables sub group increased by the highest 38.5 percent over the review period.
“There was pressure on consumer price in mid-June 2012 due to the adverse impact on supply arising from the strikes and bandas as well as the increase in the price of imported commodities because of the significant weakening of the Nepali currency against dollar,” read the report.
The government decision to hike petroleum price also showed its effect and the transportation price index increased by 17 percent. The government a month ago increased the price of diesel and kerosene by Rs 4 per litre.
Source: The Kathmandu Post
Nepal’s gross foreign exchange reserves surged 56.9 percent to Rs 427.01 billion in the first 11 months of FY 2011-12 compared to a year ago, according to the macro-economic report released by the Nepal Rastra Bank (NRB) on Wednesday. The figure was at Rs 272.15 billion as of mid-July 2011.
Based on the import trend, the current level of forex reserves is sufficient to finance merchandise imports for 11.4 months and merchandise and service imports for 10.1 months.
Even more encouraging was the overall Balance of Payments (BoP) situation. The country’s BoP recorded its highest ever surplus of Rs 113.22 billion over the review period compared to a deficit of Rs 335.6 million a year ago.
Likewise, the current account posted a surplus of Rs 61.56 billion, against a deficit of Rs 14.69 billion in previous year.
“The substantial growth of remittances and the improvement in the service account were the responsible factors for the substantial surplus in the current account,” read the report.
In US dollar terms, the BoP surplus stands at $1.41 billion and the current account surplus at $747.9 million.
Although stronger dollar boosted the BoP surplus, it was also instrumental in pushing up inflation to near double-digit level. According to the report, the year-on-year consumer inflation jumped to 9.9 percent as of the 11th month of the last fiscal year from 8.7 percent in the 10th month.
A sharp rise in the price index of food and beverage group last month contributed for more than a percentage increase in the overall inflation. Over the review
period, indices of both food and beverage and non-food and services groups increased by 9.9 percent. There has been sharp rise in the prices of vegetables, ghee and oil, milk products, meat and fish, according to NRB. The price index of vegetables sub group increased by the highest 38.5 percent over the review period.
“There was pressure on consumer price in mid-June 2012 due to the adverse impact on supply arising from the strikes and bandas as well as the increase in the price of imported commodities because of the significant weakening of the Nepali currency against dollar,” read the report.
The government decision to hike petroleum price also showed its effect and the transportation price index increased by 17 percent. The government a month ago increased the price of diesel and kerosene by Rs 4 per litre.
Source: The Kathmandu Post
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