Kathmandu, Aug. 25: The foreign exchange (forex) reserves witnessed exponential growth to reach US$ 15.27 billion by the end of the last Fiscal Year 2023/24, a 28 per cent jump from US$ 11.
74 billion a year earlier. The forex reserves are sufficient to cover the imports of goods and services for 13 months, according to the Nepal Rastra Bank (NRB)'s annual report of Current Macroeconomic and Financial Situation of Nepal. In 2022/23, when the economic situation in the country was bleak and private sector's confidence hit the rock bottom in several years, many governments and the central bank resorted to the rhetoric of a healthy external sector – increasing remittances and decreasing imports.
It meant the inflating foreign exchange reserves. Even the finance ministers gave reference to the forex reserves to show their achievement. Is a sound foreign exchange status an indicator of healthy economy of any country? Economists say, "Yes.
" Forex reserves are evidence that the country can finance its imports, repay the loan on time and help its citizens to go abroad for tourism, education and health services. Executive Director of the NRB, Dr. Gunakar Bhatta said, "A good amount of foreign currency reserves also helps the foreign investors to come to Nepal.
It can boost their investment confidence." Likewise, such reserves provide funds for the government to support the development projects although this is a rare practice in case of Nepal, according to Bhuvan Dahal, a banker and f.