Remittance surges by 23 per cent in first month of current fiscal year

 Contrary to the expectation, the remittance inflow has increased significantly in the first month of the current fiscal year, according to the macroeconomic report – released by the central bank – today.

Remittance inflows to Nepal has increased by a surprising 23 per cent to Rs 92.71 billion compared to 2 per cent in the same month of the last fiscal year. 

In the last fiscal year, the remittance inflow decreased by a marginal 0.5 per cent in the last fiscal year that ended mid-July due to coronavirus (Covid-19) pandemic that has affected the global economy.

According to the Nepal Rastra Bank (NRB) macroeconomic report, in the first month – from mid-July to mid-August – of the current fiscal year 2020-21, Nepal received Rs 92.71 billion in remittance earnings. 

 Nepali migrant workers sent home Rs 875.03 billion in the last fiscal year, which was 0.5 per cent less than a fiscal year ago due to coronavirus (Covid-19) that has left majority of the migrant workers in the labour destinations jobless.

However, Nepal received an all-time high remittance of Rs 100.16 billion in the last month of the fiscal year – mid-June to mid-July – that boosted the overall remittance earnings, though the coronavirus wreaking havoc on the global economy was expected to hit the remittances inflow to Nepal significantly.

The central bank had – after the country had imposed lockdown on March 24 – projected a drop of over 15 per cent in remittance inflow in the last fiscal year 2019-20 whereas the World Bank also had projected remittances to go down by 14 per cent. Likewise, the Central Bureau of Statistics (CBS) had also projected a reduction of Rs 163 billion – or over 18 per cent – in remittance inflow. But the country has witnessed only 0.5 per cent drop in the last fiscal year, whereas the first month of the current fiscal year also recorded a whopping 23 per cent gain in the remittance inflow.

The reduction of informal trade, hundi and other illegal channels – due to lockdown and subsequently the restrictive orders of the chief district officers – have helped remittance come through formal channels, according to the bankers. Likewise, the returnees have also brought back cash in recent months, while they used to splurge on gifts and other personal items earlier.

According to the Covid-19 Crisis Management Centre (CCMC), as of September 25, more than 76,000 stranded Nepalis have been brought home, most of them from labour destinations, whereas the number of Nepali migrant workers leaving for the labour destinations has also decreased. “The number of Nepali workers – institutional and individual-new and legalised – taking approval for foreign employment decreased by 99.2 per cent against the decrease by 19 per cent in the same period of the last fiscal year, according to the central bank, adding that the number of Nepali workers – renew entry – taking approval for foreign employment also decreased by 80 per cent in the first month of the current fiscal year. “In US Dollar terms, remittance inflows increased by 14.5 per cent compared to an increase of 0.7 per cent in the same period of the last fiscal year.”