Consumer inflation hits 5.96% in first month of current fiscal year; foreign exchange reserves surpass NPR 3.94 trillion

Kathmandu / Sept. 18: Nepal’s year-on-year consumer inflation reached 5.96 percent in the first month of the current fiscal year 2026/27 (FY 2083/84), marking the highest inflation rate in the past 21 months.

Inflation had stood at 6.05 percent in December 2024, before declining to as low as 1.11 percent. In the same month last year, consumer inflation was recorded at just 1.68 percent.

According to Nepal Rastra Bank, inflation in the food and beverage group stood at 6.77 percent, while inflation in the non-food and services group was 5.52 percent during the review month. In the same month last year, food prices had declined by 2.28 percent.

Within the food group, prices of ghee and oil increased by 15.62 percent, while fruit prices rose by 15.39 percent.

Similarly, prices of fish and meat increased by 8.65 percent, vegetables by 6.90 percent, and spices by 4.80 percent. Among non-food items, the transportation price index increased by 13.17 percent, while alcoholic beverages became 7.20 percent more expensive.

Among provinces, Madhesh Province recorded the highest inflation at 6.94 percent, while Sudurpaschim Province recorded the lowest at 4.61 percent. Inflation stood at 4.81 percent in Kathmandu Valley, 6.64 percent in the Terai, 5.95 percent in the Hills, and 5.10 percent in the Mountain region.

Foreign exchange reserves surpass $25.8 billion

Nepal’s total foreign exchange reserves reached $25.84 billion by the end of the first month of FY 2026/27, equivalent to NPR 3.946 trillion, according to Nepal Rastra Bank. This represents a 1.2 percent increase compared with the end of the previous fiscal year.

Based on the imports recorded during the first month of FY 2026/27, the existing reserves are sufficient to cover 21.8 months of merchandise imports and 18.8 months of merchandise and services imports, the central bank said.

The country’s external sector also remained strong during the review period. In the month of Shrawan (mid-July to mid-August 2026), the current account recorded a surplus of $619.2 million, while the balance of payments posted a surplus of $591.3 million.

During the same period, foreign direct investment in equity alone amounted to approximately $6.6 million.