Kathmandu, Nov. 17: Nepal’s external sector indicators showed strong improvement in the first three months of the current fiscal year 2025/26, driven largely by soaring remittance inflows and foreign currency reserves, and improved current account and balance of payments positions.

According to current macroeconomic and financial situation report based on first three months of the current fiscal year made public by Nepal Rastra Bank (NRB) on Sunday, remittance inflows increased by 35.4 per cent to Rs. 553.31 billion in the review period, a sharp rise compared to the 11.9 per cent growth recorded in the same period last year. 

Between mid-September and mid-October alone, Nepal received Rs. 201.22 billion in remittances, up from Rs. 144.17 billion in the corresponding period of the previous year. Remittance inflow was Rs. 352.08 billion by mid-September 2025.

In the US dollar terms, remittance inflows grew by 29.2 percent to USD 3.94 billion in the review period. Such inflow had increased only by 10.6 per cent in the same period of the previous year. Net secondary income (net transfer) reached Rs. 610.61 billion in the review period. Such income was Rs. 443.76 billion in the same period of the previous year. 

The number of Nepali workers, both institutional and individual, taking first-time approval for foreign employment stood at 123,459 and taking approval for renew entry stood at 77,257.

In the same period of the previous year, such numbers were 110,654 and 59,939 respectively. 

Current account surplus doubles

Nepal’s current account remained robust, recording a surplus of Rs. 237.59 billion, compared to Rs. 115.36 billion in the previous year. 

In the US dollar terms, the current account registered a surplus of 1.69 billion in the review period against a surplus of 860 million in the same period of the previous year, said the NRB. 

In the review period, net capital transfer amounted to Rs. 5.55 billion. In the same period of the previous year, such transfer amounted to Rs. 2 billion. 

Similarly, Rs.1.74 billion foreign direct investment (equity only) was received during the first three months of the current fiscal year. In the same period of the previous year, foreign direct investment inflow (equity only) amounted to Rs. 4.81 billion. 

Likewise, the Balance of Payments (BOP) recorded a surplus of Rs. 264.03 billion, up from Rs. 184.99 billion in the previous year.

In the US dollar terms, the BOP remained at a surplus of USD 1.88 billion in the review period compared to a surplus of USD 1.38 billion in the same period of the previous year. 

Forex reserves strengthened further  

Gross foreign exchange reserves climbed by 11.3 per cent to Rs. 2,979.81 billion in mid-October 2025 from Rs. 2,677.68 billion in mid-July 2025. 

In the US dollar terms, the gross foreign exchange reserves increased by 8.7 per cent to USD 21.21 billion in mid-October 2025 from USD 19.50 billion in mid-July 2025. 

Of the total foreign exchange reserves, the reserves held by NRB increased by 10.5 per cent to Rs. 2,667.7 billion in mid-October 2025 from Rs. 2414.64 billion in mid-July 2025. 

Reserves held by banks and financial institutions (except NRB) increased by 18.7 per cent to Rs. 312.1 billion in mid-October 2025 from Rs. 263.04 billion in mid-July 2025. 

The share of Indian currency in total reserves stood at 24 per cent in mid-October 2025. 

Based on the imports of the three months of 2025/26, the foreign exchange reserves of the banking sector are sufficient to cover the prospective merchandise imports of 19.9 months, and merchandise and services imports of 16.4 months, according to the NRB. 

The ratio of reserves-to-GDP, reserves-to-imports and reserves-to-M2 stood at 48.8 per cent, 136.6 per cent, and 36.8 per cent respectively in mid-October 2025. Such ratios were 43.8 per cent, 128.1 per cent, and 34.1 per cent respectively in mid-July 2025.