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BoP deficit eases to Rs17.36 billion
KATHMANDU, JUN 23 -
The balance of payments situation has improved some during the first 10 months of the current fiscal year with the deficit coming down to Rs. 17.36 billion from Rs. 22.1 billion during the first nine months.
The improvement was due in part to the injection of Rs. 3.11 billion by the International Monetary Fund. Stringent measures taken against the import of gold and silver have also helped. The slow growth in remittance inflow that rose by just 10.2 percent did not contribute much to lessening the BoP deficit. Nepal received Rs. 186.44 billion in remittance during the period under review.
Nepal Rastra Bank’s report on the country’s macro-economic situation stated that the country’s exports suffered a decline of 11.2 percent to Rs. 50.20 billion against a rise in imports by 35.6 percent to Rs. 309.88 billion leading to a trade deficit of 51 percent in goods trade. The trade deficit has almost doubled this year as it was just 27.4 percent last year.
Despite recent policy statements regarding export promotion through a revision of the monetary policy, exports declined by Rs. 13.9 percent during April-May against March-April. The rising trade deficit has resulted in a decrease in foreign exchange reserves by 14.9 percent to Rs. 238.34 billion.
During the period, liquid assets of commercial banks also decreased by 8.2 percent to Rs. 170.40 billion. The decline in liquid assets was the result of a decrease in the reserves of commercial banks with Nepal Rastra Bank and foreign countries. Liquid assets include cash and goods that can be converted into cash such as gold.
Deposit mobilisation of commercial banks have slowed in the review period as it grew by just 5.6 percent (Rs. 30.64 billion) while their lending and investments grew by 12.2 percent (Rs. 63.50 billion). This gap has hit the liquidity situation in the banking system.
However, the gap is small compared to a few months ago when lending had risen by as much as 20 percent with deposit mobilisation remaining constant. Most of the banks have stopped new lending to reduce their exposure to the real estate sector that has helped to reduce the gap.
Inflation rate goes down
POST REPORT
KATHMANDU, June 23
Inflation declined although slowly over the last four months, coming down to 10 percent during 10 months of the current fiscal year from a whopping 12 percent in the last seven months.
The continued decline in the price index of food and beverages over the period contributed to a decline in inflation, according to Nepal Rastra Bank. During the period, the price index of non-food items however continued to rise, thus preventing a fall in inflation.
The price index of food and beverages declined to 12.3 percent in 10 moths from 17.8 percent in seven months while the index of non-food items went up to 7.2 percent in 10 months from 5.3 percent in seven months. The price index of food items was at 15.7 percent in eight months and at 14.6 percent in nine months. The price rise of non-food items was 5.9 percent in eight moths and 6.3 percent in seven months.
Posted on: 2010-06-24 08:14
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