Kathmandu – Nepal’s macroeconomic and financial indicators for the first two months of the fiscal year 2025/26 reflect a stable and improving economic environment, supported by strong external sector performance, low inflation and moderate monetary growth.

According to recent data, year-on-year consumer price inflation stood at a subdued 1.87 percent, indicating controlled price levels and minimal inflationary pressure. Foreign exchange reserves reached NPR 2,881.35 billion (equivalent to USD 20.41 billion), providing a robust import cover of 16 months for goods and services—well above international adequacy standards.

The current account recorded a surplus of NPR 130.69 billion, while the overall balance of payments (BoP) remained positive at NPR 153.68 billion. This surplus was largely driven by a significant 33.1 percent increase in remittance inflows in NPR terms (27.6 percent in USD terms), amounting to NPR 174.67 billion between mid-August and mid-September.

Trade performance also improved markedly, with exports increasing by 88.6 percent compared to a 16.2 percent rise in imports, narrowing the trade deficit. On the fiscal front, the government spent NPR 180.17 billion during the review period, while revenue mobilization reached NPR 157.53 billion, indicating an early-stage budget deficit.

In the monetary sector, broad money (M2) increased by 0.3 percent in the two-month period and 12.4 percent year-on-year, reflecting modest monetary expansion. Deposits at banks and financial institutions (BFIs) decreased by 0.5 percent during the period, though they rose 12.5 percent year-on-year, while private sector credit grew by 0.9 percent in the period and 7.8 percent on a yearly basis, pointing to a gradual recovery in credit demand.

The financial market remained stable with the weighted average inter-bank rate at 2.75 percent and the 91-day treasury bill rate at 2.13 percent. Commercial banks maintained an average deposit rate of 3.96 percent and a lending rate of 7.66 percent, supporting a relatively accommodative monetary stance aimed at encouraging investment and consumption. Overall, the data suggests a cautiously optimistic economic outlook for Nepal, driven by strong remittance inflows, improving trade, and stable monetary conditions.