Forex reserve declines, marginally

The gross foreign exchange reserves has declined by 2.2 per cent to Rs 262.90 billion in mid-December 2010 from a level of Rs 268.91 billion as of mid July 2010, according to the central bank.
Such reserves had decreased by 11.2 per cent to Rs 254.47 billion in the same period last fiscal year. However, on a monthly basis, foreign exchange reserve of Rs 1.46 billion increased in the month of mid-November to mid-December (the fifth month of the current fiscal year) from the level of the a month ago in this fiscal year.
"Out of total reserve, Nepal Rastra Bank's (NRB) reserves have declined marginally by 0.8 per cent to Rs 203.72 billion in the first five months of the current fiscal year from a level of Rs 205.37 billion as at mid-July 2010," it said, adding that the gross foreign exchange reserves in US dollar terms, has however, increased marginally by 1.6 per cent to $3.67 billion in mid-December 2010 from a level of $3.61 billion as at mid-July 2010. "Such reserves had decreased by 6.9 per cent in the same period last fiscal year."
Based on the trend of import during the five months of the current fiscal year, the current level of reserves is sufficient for financing merchandise imports of 8.7 months and merchandise and service imports of 7.4 months.
The central bank purchased Indian currency (IC) equivalent to Rs 74.45 billion through the sale of the $1.02 billion in the Indian money market.
Indian rupees equivalent to Rs 66.40 billion was purchased through the sale of $870 million in the same period of the last fiscal year, it added.

IC withdrawal from ATMs in India up significantly
KATHMANDU: Indian currency (IC) withdrawal from ATMs in India has increased, according to the central bank's board member Prof Dr Bishwembher Pyakurel. "In the first five months of current fiscal year Rs 19 billion worth nepali rupees is withdrawan from the ATMs in India," he said, adding that in the same period last fiscal year, the withdrawal stood at Rs 3 billion worth Nepali ripees only. The significant amount of IC withdrawal from India has forced the central bank to look into the matter seriously. A customer can get Rs 25,000 IC at once and not more than Rs 200,000 IC in a month from the bank prompting the withdrawal from ATMs.