Current Macroeconomic and Financial Situation of Nepal
Inflation
1. The y-o-y consumer price inflation stood at 4.52 percent in mid-September 2020 compared to 6.16 percent a year ago. Food and beverage inflation stood at 6.91 percent whereas non-food and service inflation stood at 2.68 percent in the review month.
External Sector
2. In the two months of 2020/21, merchandise exports increased 10.5 percent to Rs.20.44 billion compared to an increase of 25.9 percent in the same period of the previous year. Destination-wise, exports to India increased 18.7 percent whereas exports to China and other countries decreased 54.9 percent and 2.9 percent respectively.
3. Merchandise imports decreased 22.1 percent to Rs.178.85 billion compared to a decrease of 1.2 percent a year ago. Destination-wise, imports from India, China and other countries decreased 16.5 percent, 40.1 percent, and 23.6 percent respectively.
4. Total trade deficit narrowed down 24.9 percent to Rs.158.40 billion in two months of 2020/21. Such deficit had contracted 3.1 percent in the corresponding period of the previous year.
5. Net services income remained at a deficit of Rs.5.45 billion in the review period compared to a deficit of Rs.5.80 billion in the same period of the previous year.
6. Remittance inflows increased 8.1 percent to Rs.165.73 billion in the review period against a decrease of 0.6 percent in the same period of the previous year. In the US Dollar terms, remittance inflows increased 2.6 percent to 1.39 billion in the review period against a decrease of 1.6 percent in the same period of the previous year.
7. Number of Nepali workers taking approval for foreign employment decreased 99.2 percent in the review period compared to 0.2 percent increase in the same period of the previous year.
8. The current account remained at a surplus of Rs.26.07 billion in the review period against a deficit of Rs.22.69 billion in the same period of the previous year. In the US Dollar terms, the current account recorded a surplus of 217.6 million in the review period against a deficit of 200.3 million in the same period last year.
9. In the review period, net foreign direct investment (FDI) increased 23.2 percent to Rs.2.44 billion.
10. Balance of Payments (BOP) registered a surplus of Rs.67.63 billion in the review period. Such surplus was Rs.8.83 billion in the same period of the previous year.
11. Gross foreign exchange reserves increased 2.3 percent to Rs.1433.67 billion in mid-September 2020 from Rs.1401.84 billion in mid-July 2020. In the US Dollar terms, the gross foreign exchange reserves increased to 12.20 billion in mid-September 2020 from 11.65 billion in mid-July 2020.
12. The foreign exchange reserves of the banking sector is sufficient to cover the prospective merchandise imports of 16.5 months, and merchandise and services imports of 14.9 months.
13. The buying exchange rate per US Dollar stood at Rs.117.54 in mid-September 2020 compared to Rs.120.37 in mid-July 2020.
Fiscal Situation
14. In the two month of 2020/21, fiscal position of the Government, based on banking transactions, remained at a surplus of Rs.50.37 billion compared to a surplus of Rs.105.05 billion in the corresponding period of the previous year.
15. In review period, total expenditure of the federal government based on banking transactions (excluding direct payments and unrealized cheques) stood at Rs.53.55 billion. Such expenditure was Rs.43.12 billion in the corresponding period of the previous year.
16. In review period, revenue collection based on banking transactions (including the amount to be transferred to provincial and local governments) stood at Rs.105.37 billion. Total government revenue was Rs.141.51 billion in the corresponding period of the previous year.
17. Balance at various accounts of the GoN maintained with NRB remained Rs.207.99 billion (including Provincial government and Local Authorities Account) in mid-September 2020.
18. In the two month of 2020/21, total resource mobilization of provincial governments wasRs.15.08 billion. In this period, the federal government has transferred Rs.9.46 billion as grants and revenue from divisible fund to provincial governments. During this period, provincial governments have mobilized the resource of Rs.5.63 billion from revenue and other receipts.
Monetary Situation
19. Broad money (M2) expanded 0.9 percent in the review period compared to the contraction of 0.2 percent in the corresponding period of the previous year. On y-o-y basis, M2 expanded 19.4 percent in mid-September 2020.
20. Domestic credit decreased 0.3 percent in the review period compared to a contraction of 0.1 percent in the corresponding period of the previous year. On y-o-y basis, domestic credit increased 13.3 percent in mid-September 2020.
21. Deposits at Banks and Financial Institutions (BFIs) increased 0.5 percent in the review period compared to a growth of 0.4 percent in the corresponding period of the previous year. On y-o-y basis, deposits at BFIs expanded 18.7 percent in mid-September 2020.
22. The share of demand, saving, and fixed deposits in total deposits stands at 7.5 percent, 32.6 percent and 50.9 percent respectively in mid-September 2020. Such shares were 7.9 percent, 32.5 percent and 48.3 percent respectively a year ago.
23. Private sector credit from BFIs increased 0.5 percent in the review period compared to a growth of 2.5 percent in the corresponding period of previous year. On y-o-y basis, credit to the private sector from BFIs increased 9.8 percent in mid-September 2020.
24. The average base rate of commercial banks decreased to 7.83 percent in the second month of 2020/21 from 9.53 percent a year ago. Weighted average deposit rate and lending rate of commercial banks stood at 5.61 percent and 10.18 percent respectively in review month. Such rates were 6.80 percent and 11.97 percent respectively a year ago.
25. After introduction of merger and acquisition policy aimed at strengthening financial stability, the number of BFIs involved in this process reached 207. Out of which, the license of 157 BFIs was revoked thereby forming 50 BFIs.
26. Of the total 753 local levels, commercial banks extended their branches at 747 levels as of mid-September 2020. The number of local levels having commercial bank branches was 739a year ago
27. The total number of BFIs licensed by NRB decreased to 149 in mid-September 2020 (Table 4). As of mid-September2020, 27 commercial banks, 19 development banks, 21 finance companies, 81 microfinance financial institutions and 1 infrastructure development bank are in operation. The number of BFIs branches reached 9851 in mid-September 2020 from 9765 in mid-July 2020.
|
Table 4: Number of BFIs and their Branches* |
||||||
|
Bank and Financial Institutions |
Number of BFIs |
Branches of BFIs |
||||
|
Mid-Jul 2019 |
Mid- Jul 2020 |
Mid- Sept 2020 |
Mid-Jul 2019 |
Mid- Jul 2020 |
Mid- Sept 2020 |
|
|
Commercial Banks |
28 |
27 |
27 |
3585 |
4436 |
4505 |
|
Development Banks |
29 |
20 |
19 |
1267 |
1029 |
1021 |
|
Finance Companies |
23 |
22 |
21 |
205 |
243 |
246 |
|
Microfinance Financial Institutions |
90 |
85 |
81 |
3629 |
4057 |
4079 |
|
Infrastructure Development Bank |
1 |
1 |
1 |
- |
- |
- |
|
Total |
171 |
155 |
149 |
8686 |
9765 |
9851 |
Capital Market
28. NEPSE index stood at 1541.4 points in mid-Sept 2020 compared to 1150.7 points in mid-Sept 2019. Such index was 1362.4 in mid-July 2020.
29. Stock market capitalization in mid-Sept 2020 stood Rs. 2049.28 billion compared to Rs. 1792.76 billion in mid-Jul 2020.
30. Number of companies listed at NEPSE stood 210, out of which 144 are Bank and Financial Institutions (BFIs) and insurance companies, 33 hydropower companies, 19 manufacturing and processing industries, 4 hotels, 4 trading companies and 6 others. The number of companies listed at NEPSE was 212 in mid-July 2020.
31. Share of BFIs and insurance companies in stock market capitalization is 75.8 percent. Such share for hydropower companies is 5.9 percent, manufacturing and processing industries 3.6 percent, hotels 1.1 percent, trading companies 0.3 percent and the share of other sector companies is 13.3 percent.
Impact of COVID-19
32. The adverse impact of COVID-19 has been witnessed on various sectors of economy, particularly on external trade, capital spending of the government and credit expansion of BFIs.
|
|
Monthly Situation of Major Economic Indicators |
|
||||||||||||
|
|
(Rs. Billion) |
|||||||||||||
|
Particulars |
2019 |
2020 |
||||||||||||
|
|
Mid-Month |
|||||||||||||
|
Mar-Apr |
Apr-May |
May-Jun |
Jun-Jul |
July-Aug |
Aug- Sept |
Mar-Apr |
Apr-May |
May-Jun |
Jun-Jul |
Jul-Aug |
Aug- Sept |
|||
|
Consumer Inflation (y-o-y) |
4.44 |
5.29 |
6.16 |
6.02 |
6.95 |
6.16 |
6.74 |
5.83 |
4.54 |
4.78 |
3.49 |
4.52 |
||
|
Consumer Inflation (Compared to previous month) |
0.58 |
1.19 |
1.14 |
0.64 |
2.58 |
-0.15 |
0.62 |
0.34 |
-0.10 |
0.86 |
1.33 |
0.84 |
||
|
Food and Beverage |
1.35 |
1.54 |
2.52 |
1.40 |
3.10 |
-0.34 |
1.68 |
0.59 |
-0.55 |
1.71 |
2.76 |
1.11 |
||
|
Non Food and Service |
-0.02 |
0.93 |
0.06 |
0.04 |
2.18 |
-0.01 |
-0.21 |
0.14 |
0.26 |
0.20 |
0.22 |
0.62 |
||
|
Exports |
8.6 |
8.7 |
9.3 |
9.3 |
8.8 |
9.7 |
3.9 |
3.3 |
5.9 |
9.7 |
9.6 |
10.8 |
||
|
Imports |
112.5 |
116.5 |
121.7 |
118.7 |
106.7 |
122.8 |
58.3 |
42.6 |
75.7 |
96.0 |
85.8 |
93.0 |
||
|
Travel Income |
7.1 |
9.2 |
5.6 |
5.1 |
4.4 |
5.8 |
3.3 |
0.9 |
1.2 |
2.3 |
0.6 |
0.4 |
||
|
Travel Spending |
6.4 |
5.7 |
6.8 |
9.1 |
7.0 |
7.6 |
1.3 |
0.6 |
1.0 |
1.3 |
1.6 |
1.3 |
||
|
Remittance Inflows |
71.0 |
72.1 |
73.7 |
80.3 |
75.4 |
77.9 |
34.5 |
54.0 |
94.0 |
101.4 |
92.7 |
73.0 |
||
|
Government Expenditure |
81.1 |
86.2 |
- |
- |
4.2 |
55.0 |
64.6 |
85.8 |
122.3 |
210.5 |
2.0 |
69.0 |
||
|
Current Expenditure |
57.7 |
65.3 |
- |
- |
3.5 |
50.0 |
44.6 |
76.7 |
98.4 |
116.0 |
1.7 |
63.0 |
||
|
Capital Expenditure |
19.2 |
19.4 |
- |
- |
0.6 |
4.5 |
8.7 |
9.1 |
11.9 |
65.2 |
0.1 |
4.6 |
||
|
Revenue |
81.0 |
59.1 |
- |
- |
67.2 |
71.6 |
43.9 |
16.1 |
41.1 |
146.0 |
58.8 |
46.6 |
||
|
Deposit Mobilization |
24.9 |
29.2 |
43.0 |
129.3 |
-14.2 |
28.4 |
53.4 |
44.8 |
74.1 |
173.1 |
-5.4 |
23.4 |
||
|
Private Sector Credit |
46.5 |
15.6 |
24.8 |
30.1 |
14.7 |
57.3 |
40.0 |
-13.3 |
-10.4 |
36.8 |
-17.3 |
34.1 |
||
|
Weighted Average Deposit Rate |
6.7 |
6.7 |
6.6 |
6.6 |
6.8 |
6.8 |
6.7 |
6.4 |
6.2 |
6.0 |
5.8 |
5.6 |
||
|
Weighted Average Lending Rate |
12.3 |
12.2 |
12.2 |
12.1 |
12.1 |
12.0 |
11.8 |
11.0 |
10.4 |
10.1 |
10.5 |
10.2 |
||
|
Base Rate of Commercial Banks |
9.64 |
9.59 |
9.48 |
9.57 |
9.45 |
9.5 |
9.36 |
8.96 |
8.66 |
8.50 |
8.08 |
7.83 |
||
|
Source : Nepal Rastra Bank and FCGO. |
||||||||||||||
Permanent link : https://www.nrb.org.np/contents/uploads/2020/10/Current-Macroeconomic-and-Financial-Situation-English-Based-on-Two-Months-data-of-2020.21.pdf
No comments:
Post a Comment