Current Situation of Remittance in Nepal

Published: July 9, 2025

Nepal’s remittance sector has set a new benchmark, hitting nearly NPR 176.32 billion in just one month (Jestha 2082), as per the latest report published by Nepal Rastra Bank (NRB) on Tuesday. This record inflow reflects the continued outmigration of youth seeking employment abroad due to limited job opportunities at home, which in turn has strengthened the country's external economic indicators.

Remittance Hits Historic High in 11 Months

During the first eleven months of the current fiscal year 2081/82 (from Shrawan to Jestha), remittance inflows reached an unprecedented NPR 1 trillion 532.93 billion (NPR 1,53,293 crore), the highest in Nepal's history. Compared to the same period last year, this marks a 15.5% growth in remittance.

• In Jestha 2082 alone, remittance stood at NPR 176.32 billion, compared to NPR 128.91 billion in Jestha 2081.

• In US dollar terms, remittance increased by 12.7%, reaching USD 11.25 billion.

The surge in remittance has contributed to a surplus in the current account and a significant boost in the country’s foreign exchange reserves, while also helping to curb inflation.

Foreign Exchange Reserves and Labor Migration

Foreign exchange reserves rose by 25.9%, reaching NPR 2 trillion 569.38 billion (NPR 2,56,938 crore). In US dollars, reserves increased by 22.2% to USD 18.65 billion by the end of Jestha. These reserves are sufficient to cover 17.6 months of goods imports and 14.7 months of goods and services imports.

From Shrawan to Jestha, a total of 452,324 Nepalis received final labor approvals (institutional and individual – new), and 308,067 obtained renewal labor approvals. The ongoing trend of labor migration continues to underpin the robust growth in remittance inflows.

Current Account and Foreign Investment

• Current account: The current account was in surplus by NPR 307.31 billion, up from NPR 20.38 billion in the same period last year. In US dollars, the surplus reached USD 2.26 billion.

• Net capital transfer: Net capital transfer was NPR 8.96 billion, compared to NPR 5.46 billion last year.

• Direct Foreign Investment: Direct foreign equity investment (only equity) during the review period amounted to NPR 11.09 billion, up from NPR 8.24 billion a year ago.

• Balance of Payments: The balance of payments recorded a surplus of NPR 491.44 billion, compared to NPR 425.67 billion last year.

Private Sector Credit and Investment

Bank and financial institutions increased lending to the private sector by NPR 407.62 billion in the past eleven months, an 8% rise from last year. In annual point terms, private sector lending grew by 8.7% by the end of Jestha 2082. Of this, 63% of credit flowed to non-financial institutional sectors, while 37% went to individuals and households.

• Commercial Banks: 8.4% growth in credit flow

• Development Banks: 4.7% increase

• Finance Companies: 6.9% growth

Within private sector lending, 14.5% was for working capital (agricultural and non-agricultural products), while 65% was secured by real estate mortgages.

By sector:

• Industrial production: +8.2%

• Construction: +12.9%

• Wholesale and retail trade: +5.2%

• Transport, communication, and public service: +13.5%

• Service industries: +8.8%

• Consumption sector: +10.9%

Inflation Continues to Fall

NRB’s report indicates that inflation has sharply decreased. By the end of Jestha, annual point-to-point consumer inflation was 2.72%, compared to 4.17% in the same period last year.

• Food & Beverage Group: 0.54% inflation (down from 5.85% last year)

• Non-Food & Service Group: 3.94% (up from 3.09%)

Sub-groups:

• Ghee & Oil: +10.06%

• Non-alcoholic drinks: +5.13%

• Fruits: +3.51%

• Pulses & Legumes: +2.85%

• Vegetables: +7.04%

• Spices: +3.06%

• Fish & Meat: +2.91%

Non-food, non-service:

• Miscellaneous goods/services: +9.43%

• Clothing/footwear: +6.82%

• Education: +5.88%

• Furnishings/household equipment: +5.06%

• Tobacco: +4.68%

Price increases were higher in rural areas (2.90%) compared to urban areas (2.66%). By region, annual point-to-point inflation was 2.72% in Kathmandu Valley, 2.58% in the Terai, 2.48% in the hills, and 4.18% in the Himalayas.

Conclusion

Remittance continues to be a lifeline for Nepal’s economy, driving record foreign currency inflows and contributing to economic stability. Despite the opportunities created by this inflow, the underlying cause—a lack of domestic employment—remains a critical concern for policymakers as the outflow of young labor persists. With inflation under control and foreign exchange reserves at healthy levels, the latest data paints a positive picture for Nepal’s economic resilience amid ongoing global challenges.