Exchange market in the review period

The central bank has observed three-fold increase in foreign exchange reserve in the first nine months of this fiscal year in comparison to the same period the last fiscal year.“In mid-April 2009, the gross foreign exchange reserves stood at Rs 276.05 billion, an upsurge of 29.8 per cent in comparison to the level in mid-July 2008. In the corresponding period of the previous year, such reserves had increased by 10.4 per cent,” said Nepal Rastra Bank (NRB).However, on the basis of the US dollar, gross foreign exchange reserves rose by 11.7 per cent to $3.47 billion in mid-April 2009 as against 12.1 per cent in the same period of the last fiscal year.“In the first nine months of 2008-09, NRB injected net liquidity of Rs 108.0 billion by net purchase of $1.4 billion from commercial banks through foreign exchange intervention. A net liquidity of Rs 66.0 billion had been injected through net purchase of $1 billion from commercial banks in the corresponding period the previous year. An elevated inflow of remittances necessitated such a substantial amount of intervention in the foreign exchange market in the review period,” said NRB.Workers’ remittances surged by 60.3 per cent in the first nine months of the current fiscal year in comparison to a growth of 29.6 per cent in the corresponding period the previous year, said the central bank’s report.“The current level of reserves is adequate for financing merchandise imports for over one year — 12.4 months — and merchandise and service imports for 10 months,” according to the macro-economic data based on the first nine months of this fiscal year published by the central bank.