BoP deficit stands at Rs 5 billion

The Balance of Payment (BoP) has registered Rs 5.03 billion deficit in the first four months (mid-November) of the current fiscal year.
Nepal Rastra Bank (NRB) data revelas that the overall BoP has recorded a deficit of Rs 5.03 billion during the four months of the current fiscal year compared to a deficit of Rs 15.78 billion in the same period last year. "The current account has also registered a deficit of Rs 1.92 billion -- compared to a deficit of Rs 14.78 billion in the same period last year -- due to decelerating growth rate of trade deficit and an improvement in the growth rate of transfer income particularly grants and remittances.
The workers' remittances has increased by 13.6 per cent to Rs 76.88 billion compared to 6.6 per cent growth in the same period last year. "On a monthly basis, the remittance inflows, however, declined by 16.3 per cent in October-November compared to a month ago of this fiscal year," theh central bank said, adding that under the financial account foreign direct investment (FDI) of Rs 3.42 billion has been recorded compared to the level of Rs 744 million in the same period a year ago.
However the report also shows that the import-export gap has not been bridged. Nepal's import continues to be six times higher than the exports as exports stand at Rs 21.64 billion against the imports worth Rs 121.35 billion. "Merchandise exports increased by 8.3 per cent to Rs 21.64 billion but imports -- on the other hand -- grew by two per cent to Rs 121.35 billion," the central bank said.

Liquidity cruch continues
KATHMANDU: Around Rs 15 billion revenue has been unspent in the government account sqeezing the liquidity from the market," the central bank governor Dr Yubraj Khatiwada, said here. "Had the budget come on time, the liquidity crunch would have been eased," he added. The budget was four months delayed from the regular schedule. The macroeconomic report shows that there is 'still' a gap between the deposit mobilisation and lending by commercial banks in mid-November. "The deposit mobilisation of commercial banks declined by Rs 4.5 billion during the first four months of 2010-11 -- against the growth of Rs 19 billion in the same period last year -- due to the diversion of deposit to other financial institutions on account of relatively higher interest rate offered by them," it added.