Remittance Inflows Surge Nearly 40 Percent in Seven Months

Nepal’s external sector strengthened significantly in the first seven months of the current fiscal year, driven largely by a sharp rise in remittance inflows, which increased by nearly 40 percent and helped boost the current account surplus, foreign exchange reserves and the overall balance of payments.

According to the Current Macroeconomic and Financial Situation Report based on seven months’ data ending mid-February of Fiscal Year 2025/26 released by Nepal Rastra Bank on Wednesday, remittance inflows increased by 39.8 percent to Rs 1261.01 billion during the review period, compared to a rise of 7.5 percent in the same period of the previous fiscal year.

During the one-month period from mid-January to mid-February (Magh), remittance inflows stood at Rs 198.08 billion, up from Rs 137.50 billion in the corresponding month last year.

In terms of US dollar, remittance inflows increased 33.0 percent to $8.86 billion during the review period. Such inflows had increased 5.5 percent in the same period of the previous year.

Net secondary income (net transfer) reached Rs 1384.27 billion during the review period, compared to Rs 986.34 billion in the same period of the previous year.

The number of Nepali workers obtaining first-time approval for foreign employment, both institutional and individual, stood at 245,153, while 227,424 workers received approval for re-entry. In the same period of the previous year, the numbers were 274,662 and 190,886, respectively.

Meanwhile, the current account remained at a surplus of Rs 493.78 billion during the review period, compared to a surplus of Rs 184.14 billion in the same period of the previous year.

Net capital transfer amounted to Rs 11.43 billion in the review period, up from Rs 5.83 billion a year earlier. Similarly, foreign direct investment (FDI) in equity reached Rs 10.22 billion, compared to Rs 7.43 billion in the same period last year.

During the review period, the Balance of Payments (BoP) remained at a surplus of Rs 572.73 billion, significantly higher than the Rs 284.41 billion surplus recorded in the same period of the previous fiscal year.

Gross foreign exchange reserves increased 23.3 percent to Rs 3302.66 billion in mid-February 2026 from Rs 2677.68 billion in mid-July 2025. In US dollar terms, reserves rose 16.7 percent to $22.76 billion from $19.50 billion during the same period.

Of the total reserves, those held by Nepal Rastra Bank increased 21.2 percent to Rs 2926.99 billion in mid-February 2026 from Rs 2414.64 billion in mid-July 2025.

Reserves held by banks and financial institutions, excluding the central bank, increased 42.8 percent to Rs 375.67 billion from Rs 263.04 billion during the same period.

The share of Indian currency in the total foreign exchange reserves stood at 21.5 percent in mid-February 2026, according to the central bank.

Based on the imports of the seven months of 2025/26, the foreign exchange reserves of the banking sector is sufficient to cover the prospective merchandise imports of 21.3 months, and merchandise and services imports of 18.0 months. T