Nepal’s Foreign Reserves Hit Rs. 2.95 Trillion: Import Cover Rises to 20.4 Months

Nepal’s foreign exchange reserves have reached a record Rs. 2.95 trillion (Mid-August 2025), providing the country with one of the strongest external cushions in recent years. According to the Nepal Rastra Bank (NRB), the surge in reserves has boosted the nation’s import capacity to 20.4 months of merchandise and 16.6 months when services are included— a level rarely seen in Nepal’s financial history.

The reserves, which stood at Rs. 2.82 trillion in mid-July, grew by 4.7 percent within a month, largely fueled by robust remittance inflows and a healthy Balance of Payments (BoP) surplus. Gross foreign exchange reserves alone rose to Rs. 2.80 trillion, of which 76.6% is convertible currency while 23.4% remains in inconvertible holdings.

Bank and financial institutions also contributed, holding Rs. 294 billion in foreign assets, a 12% rise compared to the previous month. Meanwhile, Nepal Rastra Bank’s reserves climbed by Rs. 100 billion in a month, reflecting stronger inflows relative to outflows.

Economists highlight that the reserves-to-import ratio has now surged to 138.3%, offering the government and NRB strong room for monetary stability, debt repayments, and currency management. However, they also caution that sustained reserve growth hinges on the continuation of high remittance inflows and prudent import management.

Despite this cushion, Nepal’s trade deficit remains large, with petroleum, gold, rice, and coal continuing to push the import bill upward. Experts warn that if remittances plateau or global commodity prices surge, the reserves could face downward pressure again.