The Nepal Rastra Bank (NRB) has released the economic and financial status report for the first month of the current fiscal year 2081/82 (July 2024). The report, published on Thursday, provides insights into the country's inflation, foreign exchange reserves, credit flows, and other key economic indicators.

Inflation: The Consumer Price Index (CPI) based inflation stood at 4.10% on an annual point-to-point basis.
- Inflation in the food and beverage group was 6.17%, while inflation in the non-food and service group was 2.94%.
- The highest increase was observed in the vegetable sub-group, which surged by 19.07%.
Foreign Exchange Reserves:
- By the end of July, total foreign exchange reserves reached USD 15.58 billion (NPR 2.092 trillion).
- There was a 2% increase in foreign exchange reserves within a month.
Remittance Inflows:
- Remittance inflows in Nepali Rupees increased by 18.0%.
Credit Flow:
- Credit extended to the private sector by banks and financial institutions increased by NPR 14.11 billion (0.3%) by the end of July.
- On an annual basis, credit flow increased by 6.2%.
Foreign Exchange Reserves Distribution:
- Out of the total foreign exchange reserves, NPR 1.8342 trillion is held by NRB.
- Banks and financial institutions (excluding NRB) hold NPR 208.79 billion in foreign exchange reserves.
Sectoral Credit Flow:
- There was an increase in credit flow to agriculture, industrial production, transportation, communication, and service industries.
- However, credit flow to the construction and wholesale and retail trade sectors declined.
Total Imports and Exports:
- Imports decreased by 0.6%, while exports fell by 9.6%.
Financial Stability:
- The balance of payments stood at a surplus of NPR 40.90 billion.
Inflation Analysis by Region:
- Inflation in rural areas increased by 4.28%, while in urban areas, it rose by 4.03%.
- Provincial inflation: Sudurpaschim Province recorded the highest inflation at 6.69%, while Koshi Province saw a 4.61% increase.

The data released by the NRB indicates that inflation in Nepal is under control. Although inflation in the food and beverage group remains high, the lower increase in the non-food group has kept overall inflation at 4.10%. Improvements were seen in foreign exchange reserves, remittance inflows, and credit flow. However, challenges persist with declining exports and reduced credit flow to the construction and trade sectors.