Capital and Reserves of NRB Expand 6.8% to Rs. 41.9 Billion

Nepal Rastra Bank’s (NRB) balance sheet for mid-August 2025 shows that the central bank’s capital and reserves have expanded by 6.8 percent, reaching Rs. 41.9 billion, up from Rs. 39.2 billion in the same month of the previous year. This growth highlights a gradual strengthening of the central bank’s financial position, driven mainly by higher valuation gains, increased retained earnings, and appreciation in foreign asset holdings.

According to the Central Bank Survey, NRB’s capital and reserve expansion reflects not only operational efficiency but also the broader improvement in Nepal’s macroeconomic fundamentals — particularly rising foreign exchange reserves and stable monetary policy outcomes. The reserve build-up also suggests that NRB has successfully managed its profit reinvestment and revaluation accounts, balancing between monetary tightening and fiscal coordination.

Economists believe that this increase in capital strength enhances NRB’s credibility in maintaining financial stability and absorbing potential market shocks. A stronger capital base allows the central bank to undertake open market operations more confidently and manage exchange rate volatility with less dependence on external borrowing or fiscal support.

However, they also note that the pace of capital growth remains moderate compared to the expansion of NRB’s total assets and liabilities, which have grown over 30% during the same period. This implies that while the central bank’s balance sheet is expanding rapidly, the core capital adequacy may need further enhancement to sustain long-term stability amid global financial uncertainties.