Foreign Exchange Reserves Surge by 31.2%, Enough to Cover Over 18 Months of Imports

Kathmandu – Nepal’s foreign exchange reserves saw a significant increase in FY 2024/25 (Nepali FY 2081/82). According to Nepal Rastra Bank, total reserves rose by 31.2%, reaching Rs. 2.68 trillion at the end of Ashad 2082, compared to Rs. 2.04 trillion a year earlier.

In U.S. dollar terms, reserves grew from USD 15.27 billion to USD 19.50 billion, marking a 27.7% increase.

NRB vs. Other Financial Institutions

Of the total reserves, those held by Nepal Rastra Bank climbed from Rs. 1.85 trillion to Rs. 2.41 trillion, a 30.6% rise.
Similarly, reserves with banks and financial institutions (excluding NRB) increased from Rs. 192.55 billion to Rs. 263.04 billion, a 36.6% rise.

As of Ashad 2082, the share of Indian currency in total reserves stood at 23.1%.

Reserve Adequacy

Based on import levels, the reserves are sufficient to cover 18.2 months of goods imports and 15.4 months of goods and services imports.

At the end of Ashad 2082, reserves stood at 43.8% of GDP, 128.1% of total imports, and 34.1% of broad money supply (M2). In the previous year, these ratios were 35.8%, 108.6%, and 29.3%, respectively.

External Investment Position

Nepal’s total external assets amounted to Rs. 2.93 trillion, while liabilities stood at Rs. 2.15 trillion. This resulted in a net international investment position (NIIP) surplus of Rs. 783.26 billion, a sharp improvement from the Rs. 305.84 billion surplus recorded a year earlier.

The significant growth in reserves highlights an improved external financial position for Nepal, with short-term import needs well covered. Analysts, however, caution that despite this positive buffer, the country’s heavy reliance on imports poses long-term risks. They stress that strengthening exports and domestic production is essential to ensure sustainable reserve growth.