March 31: The latest report of Nepal Rastra Bank (NRB) showed that the inflow of remittance to Nepal has decreased by 0.5 percent compared to last year. The inflow of remittance is expected to further slump in the coming days due to the ban imposed by the government on issuing labour permits and the protracted lockdown in the labour destination countries.

At present, the inflow of remittance has reduced significantly due to the imposition of lockdown and curfew in the countries offering foreign employment to Nepali workers in a bid to contain the spread of coronavirus.

According to remittance companies, the inflow of remittance has decreased by 25 percent in the recent days compared to the normal times.

Flow of remittance into the country had been gradually decreasing since the last five months.

The country recorded remittance inflow of Rs 75.40 billion in the first month of the current fiscal year (mid-July to mid-August). In the following month (mid-August to mid-September), remittance increased by Rs2.93 billion to Rs 78.33 billion. But since then, it has been decreasing every month.  The inflow of remittance was the lowest between mid-January to mid-February in the current fiscal year at Rs 65.95 billion.

Nepal’s major source of remittance is foreign employment. But this sector has been badly affected by the coronavirus pandemic, which has killed almost 38,000 people worldwide and infected nearly 800,000 people across the globe as of Tuesday afternoon (March 31).

On one hand, the government has stopped issuing labour permits while on the other hand the some of the major labour destination countries have themselves imposed travel restriction for foreigners, including Nepali migrant workers. This has prevented Nepali migrant workers from travelling abroad for foreign employment.

According to NRB, a major portion of remittance comes to Nepal from countries like Malaysia, Saudi Arabia, USA, India among other countries. All of these countries are currently struggling to cope with the crisis created by the coronavirus pandemic.

This has greatly affected financial activities in the labour destination countries which in turn has threatened the job security of Nepali migrant workers. Subsequently, the inflow of remittance has been largely affected by the pandemic, which originated from China and now has shifted to Europe, USA and the middle east.

Most of the families in Nepal are dependent on remittance sent by their family members from abroad.

Economist and former vice chairman of the National Planning Commission Swornim Wagle says that the inflow of remittance is likely to decrease if the coronavirus pandemic gets protracted.

Another economist Keshav Acharya also shares similar view of a grim scenario.

According to Suman Pokharel, CEO of IME Remit, which brings in most of the remittance to Nepal from abroad, also believes that there are high chances that the flow of remittance will decrease in the coming days. Things will get further complicated if the current situation gets prolonged, he said.

Another reason for the decline in remittance inflow is that the Nepali nationals are not capable to send money to their homeland through digital medium.

“Nepali migrant workers in the Gulf countries send money back to their homes by visiting the counters of the remittance company. This is practically not possible at the moment,” said Pokharel.

Chairman of Nepal Bankers’ Association Bhuvan Dahal expressed concerns that the two major sources of income of the country – remittance and tourism – are in trouble due to the pandemic.

“Foreign currency has great significance for a country like Nepal which is chiefly dependent in import,” he said, adding, “Currently, we have enough foreign currency to meet the demand of import for the next eight months. But things will get worse if the coronavirus pandemic lingers any longer.”

NRB Spokesperson Gunakar Bhatta says although they are yet to get the official data, the inflow of remittance will decline to a great extent in the upcoming report.