Nepal’s Foreign Reserves Surge to Rs. 93 Billion: Strongest Cushion in Recent Years

Nepal Rastra Bank’s latest Balance of Payments (BoP) report shows that Nepal’s foreign exchange reserves surged by Rs. 93.5 billion in just one month (up to mid-August 2025/26), providing the strongest external cushion the country has seen in recent years.

This sharp rise was fueled by record remittance inflows of Rs. 176 billion, along with stable inflows under secondary income and controlled capital outflows. Reserve assets, including currency deposits and foreign securities, reached unprecedented levels, helping strengthen Nepal’s ability to finance imports and external obligations.

Economists say this boost in reserves is timely, as the country faces persistent trade deficits exceeding Rs. 109 billion per month. The reserves will allow Nepal to cover over 10 months of imports, a benchmark considered comfortable for external stability.

However, experts also caution that the reliance on remittance-driven reserves poses long-term risks. If global labor demand in Gulf and Malaysia declines, or if remittance inflows weaken, Nepal’s reserves could face downward pressure. To ensure sustainability, analysts stress the need to expand export capacity, attract FDI, and diversify income sourcesbeyond remittances.