NRB’s Net Foreign Assets Increase by Rs 697.5 Billion While Domestic Assets Contract by 59.5% – FY 2025/26

According to the Nepal Rastra Bank (NRB) Central Bank Survey for Mid-September 2025, the country’s Net Foreign Assets (NFA) surged by Rs 697.5 billion, marking a 34.9% year-on-year increase, while Net Domestic Assets (NDA) contracted sharply by 59.5%, underscoring a shift in Nepal’s monetary structure toward foreign reserve accumulation.

This rise in NFA was driven primarily by a strong build-up in foreign exchange reserves and gold investments, supported by favorable balance of payments (BoP) conditions and sustained remittance inflows. Total foreign assets reached Rs 2.74 trillion, up from Rs 2.04 trillion last year, while foreign exchange holdings alone expanded by Rs 653.4 billion, reflecting improved external liquidity and foreign income growth.

Conversely, domestic assets continued to contract due to reduced claims on the government and financial institutions. The NRB’s claims on government dropped by 40.9%, mainly because of the decline in development bonds and treasury bill holdings. Similarly, claims on private and financial institutions saw minor declines, indicating restrained domestic credit expansion by the central bank.

This structural shift — rising foreign assets and falling domestic assets — suggests that monetary expansion in FY 2025/26 was largely driven by external reserves rather than domestic credit. The growth in foreign holdings helped NRB sustain liquidity in the financial system while tightening domestic monetary operations to curb inflation and stabilize the exchange rate.