Monetary Situation: Significant Growth in Money Supply

Nepal’s monetary situation has shown notable improvements in the fiscal year 2081/82. According to the latest data published by Nepal Rastra Bank, the broad money supply (M2) increased by 12.5 percent. Although this is slightly lower than the previous year’s 12.9 percent, the trend indicates stable growth.

During the review period, net foreign assets (adjusted for exchange rate valuation gain/loss) increased by Rs. 594.54 billion, compared to Rs. 502.49 billion in the previous year. This highlights stronger foreign currency reserves and improved external sector stability.

Similarly, currency in circulation witnessed a sharp rise. It grew by 16.1 percent in the current year, compared to just 7.7 percent in the previous year. This surge is seen as an indicator of sufficient liquidity within the banking system.

Analysis of the past five years shows fluctuations in both money supply and currency circulation; however, the current growth rate signals a positive direction for monetary stability.