Trade figures show that mainly the leading exportable industries took the beating of international instability. This caused exports of hand-knotted woolen carpet to drop by 29 percent to Rs 2.62 billion during the period. [break]
Export of pulses too dropped by 28 percent to Rs 2.8 billion and readymade garments declined by 25 percent to Rs 2.66 billion.
Likewise, key exports to India like readymade garments, corrugated sheets, plastic utensils, pulses and GI pipe, among others, also recorded a substantial drop during the period.
Buoyed by rising fuel and vehicle consumption and illicit trade of gold across the porous Nepal-India border, imports grew at 44 percent and touched Rs 253.73 billion during the period. This widened the country´s trade deficit to Rs 213.33 billion.
Likewise, the ratio of exports to imports dropped to 15.9 percent in the first eight months of 2009/10 from 24.9 percent a year earlier.
During the period, remittance receipt grew at low rate of 9.9 percent and the country received Rs 143.95 billion in remittances. As a result, the country suffered current accounts deficit of Rs 32.58 billion, whereas it was a surplus of Rs 28.94 billion during the same period last year.
The country´s gross foreign exchange reserve too dropped to Rs 236.34 billion in mid-March 2010 from Rs 279.99 billion of mid-July 2009. Owing to accelerated trade and payment deficits with India, Nepal Rastra Bank (NRB) purchased Indian currency worth Rs 63.6 billion through the sale of USD 1.4 billion in the Indian money market during the period.
Despite industrial gloom, credit lending by commercial banks to the private sector grew by 16.5 percent (Rs.66.7 billion) during the period. Of the total private sector credit, credit to manufacturing sector increased by 9.5 percent during the period.
“Mainly industries like sugar, cement, and iron and steel witnessed a significant credit expansion under the industrial production sector credit,” says a report of Nepal Rastra Bank. Similarly, credit to the agricultural sector also increased by Rs 2 billion during the first eight months of 2009/10.
Although the commercial banks rapidly jacked up interest rates to lure depositors, they managed to mobilize mere Rs 22.9 billion in deposits over the first eight months of 2009/10. They had mobilized total deposits of Rs 60.2 billion during the same period last year.
Likewise, consumer inflation moderated to 11.2 percent in mid-March 2010 compared to 13.1 percent in the same period last year.
NRB report notes that the prices of food and beverage items increased at lower rate of 15.7 percent compared to last year´s. The prices of non-food items and services also rose only by 5.9 percent in mid-March, whereas they had risen by 8.8 percent during the same period last year.
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