Economists suspect foul play as trade credit, miscellaneous accounts surge
The overall Balance of Payment (BoP) recorded a whopping surplus of Rs 33.89 billion in the three months of fiscal year 2011-12, compared to a deficit of Rs 6.88 billion in the same period last year, according to the central bank.
The central bank contributed surplus current account and bulging service account for the BoP surplus, whereas the economists contributed the whopping BoP surplus to 'the unusual' trade credit and miscellaneous accounts.
"The whopping BoP surplus could mean either there is significant foreign investment within the country or huge export surge, which the central data defied," they said, adding that the foreign investment posted 2.20 billion compared to Rs 0.18 billion in the same period a year before.
Similarly, total trade deficit during the three months went up by eight per cent to Rs 82.23 billion. "The merchandise exports increased by 6.9 per cent to Rs 18.04 billion, whereas merchandise imports increased by 7.8 per cent to Rs 100.26 billion in the first three months," according to the central bank data.
"The BoP is not realistically calculated," economists said, adding that the tradition has it that the central bank has enough room to play. "The miscellaneous account and trade credit account recorded Rs 10.95 billion and Rs 10.08 billion respectively, making the BoP surplus data suspicious."
In the same period last fiscal year, the miscellaneous account was negative.
According to the central bank, the current account, however, has recorded Rs 13.82 billion surplus against Rs 2.17 billion deficit in the same period last fiscal year. "The acceleration in the growth of remittance along with improvement in the service account was attributed to the surplus in the current account," the central bank said, "After experiencing deficit for a long time, the service account has also turned into surplus mainly due to a significant rise in tourism income."
Tourism income also rose by 29.8 per cent in the first three months of 2011-12 in contrast to a decline by 20.9 per cent in the same period last year. The net transfer account registered a growth of 19 per cent to Rs 87.95 billion compared to that of a year ago.
Under transfers, pension receipts, however, declined by 22.9 per cent to Rs 6.66 billion.
But the depreciation of Nepali rupee vis-à-vis the US dollar benefitted the country as the third month of the current fiscal year witnessed an inflow of Rs 75.88 billion in remittance.
"Workers' remittances increased by 28.3 per cent to Rs 75.88 billion in the compared to its growth of 14.2 per cent in the same period last year," according to the central bank.
Nepali currency vis-à-vis the US dollar depreciated by 9.15 per cent in
mid-October 2011 from the level of mid-July 2011, it said, adding that it had appreciated by 5.25 per cent in the same period of a fiscal year ago. "The exchange rate of one US dollar stood at Rs 78.10 in mid- October compared to Rs 70.95 in mid-July."
Last fiscal year, the country had received Rs 253.55 billion remittances — an increment by 9.4 per cent billion compared to its growth of 10.5 per cent a previous fiscal year.
On a monthly basis, the remittance inflows increased by 12.2 per cent in September-October compared to the value of the previous month.
The remittance inflow
Shrawan — Rs 17.7 billion
Bhadra — Rs 47.33 billion
Ashwin — Rs 75.88 billion
(Source: Nepal Rastra Bank)