Wednesday, August 5, 2009

Remittance jumps to a record high of Rs 188.88 billion

Dexpite global financial crisis and teh slowdown of Nepali migrant workers outflow, the remittance has posted a record high as it increased by 51 per cent to Rs 188.88 billion in the first 11 months of the fiscal year 2008-09 in comparison to the same period last fiscal year, said the Nepal Rastra Bank (NRB). The NRB has estimated Rs 200 billion remittance by the end of the fiscal year 2008-09 in the Monetary Policy for this fiscal year.
“Under transfers, workers' remittances soared by 51 per cent in comparison to the growth of 37.3 per cent in the corresponding period of the last fiscal year,” according to the current Macroeconomic Situation based on the first eleven months' data of 2008-09.
Similarly, grants rose by 22.3 per cent in the review period in comparison to a growth of just 6.6 per cent in the corresponding period last year. Due to the increase in remittance, the overall Balance of Payment (BoP) also posted a significant surplus of Rs 39.06 billion in the first eleven months of last fiscal year in comparison to a lower surplus of Rs 24.67 billion in the corresponding period a year ago, said the report.
“The current account recorded a double growth as it posted massive surplus of Rs 39.58 billion in the review period in comparison to a surplus of Rs 15.98 billion in the same period last fiscal year. The significant current account surplus in the review period was largely attributed to the rise in net transfers by 38.5 per cent in the first eleven months of 2008-09.
In mid-June 2009, the gross foreign exchange reserves stood at Rs 271.68 billion, an increment of 27.8 per cent compared to the level as at mid-July 2008. Such reserves had risen by 25.2 per cent in the corresponding period of the preceding year. On the basis of US dollar, gross foreign exchange reserves went up by 15.8 per cent to $3.59 billion in mid-June 2009. Such reserves had risen by 18.6 percent in the same period of the previous year. The current level of reserves is adequate for financing merchandise imports of 11.8 months and merchandise and service imports of 9.6 months, said the report.
During the review period, exports increased by 15.4 per cent in contrast to a decline by 2.1 per cent in the corresponding period last year. Exports to India rose by 8.5 per cent in as against a decline by 8.2 per cent likewise exports to other countries expanded by 28.8 per cent compared to an increase of 12.3 per cent in the same period last fiscal year.
The budget remained at a surplus of Rs 1.7 billion in contrast to a deficit of Rs 9.3 billion in the corresponding period last year. An impressive growth of resource mobilisation relative to the government expenditure accounted for such a budget surplus in the review period. Similarly, the government has a significant cash surplus of Rs 17.4 billion (including the 3.9 billion of previous year) with NRB.
Similarly, the government has failed to control the price hike as the price hike is still over 12 per cent to 12.3 per cent. “The year-on-year (y-o-y) inflation as calculated by the consumer price index rose to 12.3 per cent in Mid-June 2009 from 11 per cent in the same period of last year,’ said the report. The inflation, in the review period, was driven mainly by the rise of 19 per cent in food and beverages group. The price index of non-food and service group increased by only 5.1 per cent. The price rise of food and beverages and non-food and services group, was 13 per cent and nine per cent respectively in Mid-June 2008.
In the review period, the y-o-y core inflation rose to 12.6 percent from 8.3 percent a year ago.

No new licence for banks and financial institutions: NRB
KATHMANDU: Nepal Rastra Bank (NRB) has decided to stop issuing new licenses for the new banks and financial institutions. According to the NRB Board meeting on Monday, the central bank is going to review the existing licensing policy and procedures. “The NRB has halted the applications for new banks and financial institution until it apprises the current situation and prepare a report on existing licensing policy," a press note from the central bank said. However, the banks and financial institutions that are in pipeline will get the licence, the central bank has clarified. “It will also entertain the application for D-class micro-finance institutions,” the central bank said. The current governor at the time of his reappointment has hinted on halting the licences for the new banks and financial institutions as according to him “central bank wish to have few but stronger banks rather than more and number of banks and financial institutions.” There are 181 banks and financial institutions – 26 commercial banks, 63 development banks, 77 finance companies, 15 micro-finance development bank – by the end of the fiscal year 2008-09.

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