Remittance inflow in the first ten months of the current fiscal year has surpassed the total amount of remittances received during last fiscal year. Inflow of remittance grew by 29.7 percent in the ten months of the current fiscal year 2013/14 compared to the corresponding period during the last fiscal year, according to the Nepal Rastra Bank.

Total inflow of remittance stood at Rs 444.47 billion during the review period, whereas the inflow of remittance accounted Rs 434.58 billion in the whole fiscal year of 2012/13. Total remittance inflow in the ten months of the fiscal year is equivalent to 25 percent of the country´s gross domestic product (GDP). A recent study by the World Bank has ranked Nepal in third position in the world in terms of the contribution of remittances to the GDP.

Experts have said that remittance inflow has been growing due to the huge devaluation of the Indian currency against the US dollar from the beginning of 2014. And, as result, Nepali currency, which is pegged with Indian currency, also devalued, bloating the remittance figures in Nepali terms. 

"Workers were also encouraged to send more remittance home because of the Nepali currency devaluation," Suman Pokhrel, chief executive officer at International Money Express told Republica, adding "Also, the efforts by remittance companies to encourage migrant workers to use formal channels for sending remittances also contributed to the higher remittance income." Remittance inflow surges mostly during the festivals and and farming seasons, he said. 

Officials projected the remittance income to reach around Rs 550 billion this year. Inflow of the remittance had shrunk from 2009 to 2011 due to the global financial crisis, which affected the the major labour destinations in the Gulf.

Published on: 17 June 2014 | Republica