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#NepalEconomy #ForeignReserves
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By Sandeep Chaudhary

Import Capacity Strengthens: Nepal Can Finance Over 20 Months of Imports

Import Capacity Strengthens: Nepal Can Finance Over 20 Months of Imports

Nepal’s external position has strengthened remarkably, with the country now able to finance more than 20 months of merchandise imports and over 16 months of combined goods and services imports, according to the latest data from Nepal Rastra Bank (NRB). This marks one of the strongest levels of import coverage in recent years — a direct result of rising foreign exchange reserves, a steady balance of payments (BoP) surplus, and record remittance inflows.

As of mid-August 2025, gross foreign exchange reserves reached Rs. 2.8 trillion, up 4.8 percent from the previous month. Of this, convertible reserves accounted for Rs. 2.14 trillion, while inconvertible reserves stood at Rs. 656 billion, reflecting a stable and diversified currency mix. The improvement in reserves has provided Nepal with a significant buffer against external shocks such as oil price fluctuations or import surges.

Economists view this as a sign of improved macroeconomic resilience, noting that the current coverage comfortably exceeds the international adequacy benchmark of three months. However, experts also caution that the growth is driven primarily by remittance inflows and import compression, not by export expansion. For long-term sustainability, Nepal must focus on export competitiveness, FDI attraction, and domestic production growth.

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