Kathmandu, Sept. 30: The Nepal Rastra Bank (NRB) today unveiled the recent macroeconomic condition of the country based on first month of the current fiscal year.
The NRB has said that the broad supply declined by 0.2 per cent during the first month of the 2011/12 fiscal year compared to 0.6 percent in the corresponding period of the previous year. Despite some decline in net domestic assets of the banking sector, the broad money contracted at lower rate in the review period on account of remarkable increase in net foreign assets. Narrow money declined by 3.6 per cent during the review period.
Similarly, net foreign assets increased by Rs. 8.30 billion (3.8 percent) during the review period compared to Rs. 1.51 billion (0.7 percent) in the corresponding period of the previous year, according to the central bank. Governor of the Nepal Rastra Bank, Dr Yubaraj Khatiwada said the improvement in merchandise export and workers' remittances as well slower growth in import were the factors responsible for the improvement in balance of payments (BoP) leading to the increase in net foreign assets of the monetary sector.
Likewise, the deposit mobilization of commercial banks increased by Rs. 0.74 billion while the loan and advances increased by Rs. 1.70 billion in the review period. The deposit mobilization had declined by Rs. 5.01 billion and loan and advances had also declined by Rs. 4.58 billion in the corresponding period of the previous year. Credit to private sector dropped by Rs. 4.68 billion during the review period compared to Rs. 3.76 billion in the corresponding period of previous year, according to NRB.
According to the report, the NRB injected net liquidity of Rs. 0.73 billion through repo auction in the first month of 2011/12. Liquidity of Rs. 12 billion was mopped up through reverse repo auction in the corresponding period of the previous year. The NRB injected net liquidity of Rs. 18.38 billion through the purchase of USD 256.6 million from foreign exchange market in the first month of 2011/12.
“The NRB purchased Indian currency equivalent to Rs. 18.60 billion through the sale of USD 260 million in the Indian money market during the review period. INR equivalent to Rs. 11.92 billion was purchased through the sale of USD 160 million in the corresponding period of previous year”, said the NRB.
Similarly, inter-bank transaction of commercial banks stood at Rs. 46.48 billion in the first month of 2011/12 compared to Rs. 26.35 billion in the corresponding period of the previous year. Liquidity injection through the standing liquidity facility amounted to Rs. 3.94 billion during the review period.
According to the NRB, the year to year inflation as measured by the consumer price index increased by 7.7 percent in mid-August 2011 as compared to 9.5 percent of the corresponding period of the previous year. During the review period, the index of food and beverage group increased by 9.9 percent and the index of non-food and services group increased by 5.8 percent respectively. The indices of these groups had increased by 12.5 percent and 7.0 percent respectively in the corresponding period of the previous year.
The NRB said that government budget remained at a surplus of Rs. 10.93 billion. A high growth of revenue mobilization relative to government expenditure accounted for such a budget surplus in the review period.
The NRB said in the review period, the growth rate of VAT and excise accelerated; however, the growth rates of customs duties, income tax and vehicle revenue decelerated compared to that of the corresponding period of the previous year. Likewise, the registration fee, educational service tax and non-tax revenue has declined in the review period compared to that of corresponding period of the previous year.
The overall BOP recorded a surplus of Rs. 8.30 billion during the first month compared to a surplus of Rs. 1.51 billion in the same period of the previous year. In the review period, the current account registered a surplus of Rs. 727.7 million compared to a deficit of Rs. 2.42 billion in the same period of the previous year.
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