Cash flow rises for Dashain: new notes, remittances keep market active

Targeting Dashain and Tihar, Nepal Rastra Bank released about 100 billion rupees into the market during the month of Asoj. As a result, currency in circulation has reached nearly 898 billion rupees, up from about 786 billion rupees in Asoj last year.

According to the central bank, about 16 billion rupees worth of new notes were exchanged between Asoj 1 and 30. Of this, about 12 billion rupees was distributed through banks and financial institutions, and about 4 billion rupees directly to the public.

The central bank spends about 3 billion rupees annually on printing, distributing and managing notes. Managing currency has become challenging because a large amount of cash entering the market carries the risk of raising demand and prices.

Officials say nearly a quarter of annual remittances typically arrives around Dashain and Tihar, as Nepali migrant workers send money home to celebrate the festivals. Last year, remittance inflows totalled about 2,363 billion rupees, nearly 35.8 percent of gross domestic product.

At a time when floods and landslides have slowed the economy, festival shopping, the rush of people returning to their villages, and remittances have together increased the flow of cash in the market.