Wednesday, November 18, 2009

Nepal forex reserves rise by 33.3 percent

Nepal forex reserves rise by 33.3 percent

KATHMANDU: Nepal's central bank, Nepal Rastra Bank said Monday country's gross foreign exchange reserves stood at Rs 283.4 billion, a rise by 33.3 per cent in mid-May 2009 in comparison to mid-July 2008.

In a statement issued here the central bank said in the same period year, such reserves had risen by 19.3 per cent last.
On the basis of the U.S. dollar, gross foreign exchange reserves rose by 15.4 per cent to $ 3.6 billion in mid-May 2009. "Such reserves had gone up by 15.5 per cent in the same period of the previous year," the statement said.

The current level of reserves is adequate for financing merchandise imports over 12.4 months and merchandise and service imports over 10.1 months. A major contributor to the increase in foreign reserve is remittance. "Under transfers, workers' remittances soared by 55.5 per cent in the review period compared to a growth of 35.5 per cent in the same period of the last fiscal year," it said.

In the first ten months of the current fiscal year, NRB mopped up Rs 11.7 billion of net liquidity through open market operations. Of the total liquidity of Rs 20.7 billion mopped up in the review period, Rs 7.5 billion was mopped up from outright sale auctions and Rs 13.3 billion from reverse repo auctions.

"Despite a substantial injection of liquidity through foreign exchange intervention in the review period, a liquidity of Rs 9.0 billion has been injected through repo auctions in the seventh and eighth months of the review period on account of a shortfall in liquidity - particularly due to a higher cash balance of the government with NRA and a higher expansion of currency in circulation in the review period, "it said.

Net liquidity of Rs 4 billion was mopped up in the corresponding period of the previous year through open market operation including Rs 6.5 billion through outright sale auctions, Rs 6.6 billion through reverse repo auctions and Rs 9.0 billion through repo auctions.

In the review period, NRB injected net liquidity of Rs 121.5 billion by net purchase of $ 1.6 billion from commercial banks through foreign exchange intervention.

"A net liquidity of Rs 76.6 billion had been injected through a net purchase of $ 1.2 billion from commercial banks in the corresponding period of the previous year," added NRA.

Period at elevated inflow of remittances necessitated such a substantial amount of intervention in the foreign exchange market in the review.

NRB purchased Indian currency (IC), worth 59.9 billion through the sale of $ 1.3 billion in the review period. IC48.3 billion had been purchased through the sale of $ 1.2 billion in the corresponding period a year ago.

A depreciation of Nepali currency vis-à-vis the U.S. dollar encouraged import from India against the payment of CAP and, therefore, a higher dollar amount of CAP purchase was made as against a sale of the U.S..
Nepal forex reserves rise by 33.3 percent

No comments:

Post a Comment


forex, trading, market, foreign, exchange, market, currency, trading, forex broker, online trading, forex analysis, forex ranges, forex news, forex qoutes

Web Analytics