October 30, Kathmandu. The current account deficit has exceeded Rs. Nepal Rastra Bank (NRB) on Tuesday made public its economic and financial situation for the first quarter, stating that the current account was in deficit of Rs 151.70 billion.
The current account had a surplus of Rs. 33.38 billion in the first quarter of the previous year. The current account surplus of USD 279.9 million in the corresponding period of the previous year was Rs. 1.28 billion in the review period.
Not only the current account but also the balance of payments is in deficit in the first quarter of the current Fiscal Year. According to NRB, it has a deficit of Rs. 76.14 billion as of mid-October. 101.09 billion in the corresponding period of the previous year. The balance of payments, which had a surplus of Rs. 851 million in the corresponding period of the previous year, had a deficit of Rs. 643.1 million in the review period.
What is balance of payments and current account?
The government has current, capital and financial accounts for monetary transactions between one country and another. The current account is the account showing the details of current income and expenditure of the country. In this account both import and export of goods, import / export of services, remittances and remittances are taken into account.
The balance of payments is an aspect of the current account. There is a link between current account deficit and negative balance of payments. As the income increases, the current account shows a profit. Expenditure increases appear to be in deficit.
Apart from the current account, the capital account deals with other countries in the form of property purchase and sale, loans and borrowings, investments and foreign exchange funds. Even in the financial account, the data of foreign investment in big projects is kept.
The difference between the amount entering Nepal and the amount leaving Nepal is the balance of payments situation. The loss of balance of payments means that more money has flowed out of Nepal. Less money is coming to Nepal than that. This is due to rising imports and low exports.