October 24: The inflow of remittance to Nepal has shrunk once again after 19 months.  A report released by Nepal Rastra Bank on Wednesday states that remittance decreased by 0.3 percent to Rs 153.73 billion in mid-September this year compared to the corresponding period of last year. The Current Macroeconomic and Financial Situation of Nepal unveiled by the central banks states that remittance had increased by 33.4 percent in the same period of the previous year.

The last time that the inflow of remittance had slumped was in December 2017.

Stakeholders have attributed the decrease in remittance to the significant reduction in the number of Nepali migrant workers leaving for foreign employment last year. Its effects are clearly visible in the decrease in remittance, according to people who are involved in the foreign employment sector.

Meanwhile, Deputy Governor of Nepal Rastra Bank Chintamani Shivakoti said remittance is subject to fluctuation, which quite normal.

“The foreign exchange rate had reduced in mid-September due to which inflow of remittance might have been affected,” said Shivakoti.

“Looking at the past trend, remittance increases after mid-September during Dashain and other festivals,” he added.

 In the first two months of 2019/20, merchandise imports decreased 1.2 percent to Rs 229.50 billion against an increase of 38.5 percent in the same period of the previous year.

Destination-wise, imports from China increased 39.2 percent whereas imports from India, and other countries decreased 2 percent and 19.8 percent respectively. Commodity-wise, import of readymade garments, crude palm oil, other machinery and parts, hot rolled sheet, chemical fertilizer, among others, increased whereas imports of aircraft spareparts, MS billet, gold, petroleum product, cement, among others, decreased in the review period.

Likewise, the country’s merchandise export increased by 25.9 percent to Rs 18.5 billion compared to an increase of 8 percent a year ago. Destination-wise, exports to India and other countries increased 46 percent and 0.6 percent respectively whereas exports to China decreased 17.4 percent. Mainly exports of palm oil, cardamom, jute goods, yarn (polyester and other), textiles, among others, increased whereas exports of zinc sheet, juice, wire, readymade garment, pashmina, among others, decreased in the review period.

According to the central bank, Nepal’s total trade deficit narrowed 3.1 percent to Rs 211 billion in the two months of 2019/20. The export-import ratio increased to 8.1 percent in the review period from 6.3 percent in the corresponding period of the previous year.

Meanwhile, the year-on-year consumer price inflation stood at 6.16 percent in mid-September 2019 compared to 3.86 percent a year ago. Food and beverage inflation stood at 6.51 percent whereas non-food and service inflation stood at 5.89 percent in the review month.