<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110161132/636d19939c7e80680e0ac827jpeg.jpg" alt="" width="664" height="450"/><figcaption></figcaption></figure>Even as Nepal tries to recover from the impact of the pandemic, the country’s economic indicators released this week by the central bank show dismal performance in the first two months of the fiscal year.The report by the Nepal Rastra Bank shows that Nepal’s foreign currency reserves fell to $11.1 in mid-September, 6.6% below the figure for last year, this is enough to pay for only 8 months of total imports.Even more worrying is that <a href="https://www.nepalitimes.com/banner/defying-predictions-nepals-remittances-still-high/" target="_blank" rel="noopener noreferrer">overseas remittances that had held steady despite the pandemic</a> for the past two years have now started declining. Nepalis abroad sent home Rs155 billion in the past year, which is 6.3% below the same period last year.Despite the pandemic, remittances had risen by 8.1% in fiscal year 2019-2020. Experts attributed that to overseas workers sending money home as the economic crisis hit families back home, and not necessarily due to higher earnings.The concurrent decrease in foreign currency reserves to finance <a href="https://www.nepalitimes.com/editorial/blood-sweat-tears/" target="_blank" rel="noopener noreferrer">Nepal’s imports, mainly of petroleum</a>, food and other commodities, is seen as an indicator of an impending economic crisis. The main reason for the current downturn is shrinking remittances, which prop up Nepal’s economy.Indeed, compared to 2019-2020, the past year has seen a steep 76% increase in imports to a record Rs352 billion, mainly due to a rise in the import of petroleum products, gold, silver and other items, according to Rastra Bank figures.Even though exports went up by 115% in the same period to Rs44.4 billion, it did not put much of a dent on the trade deficit which has risen to Rs270 billion in the past two months of the fiscal year. This represents a 71% increase in the trade gap compared to last year.The <a href="https://www.nepalitimes.com/latest/nepal-less-and-less-able-to-feed-itself/" target="_blank" rel="noopener noreferrer">growing asymmetry between imports and exports</a> means that the country’s balance of payments situation is now Rs83.4 billion in the red — up from Rs38.7 billion in July.With the alarm bells ringing, the government has drastically reduced the amount of money Nepalis can officially exchange before traveling abroad from $1,500 to $200-500. This week, further austerity measures were announced, including a ban on the purchase of vehicles for official use.The negative trend in economic indicators could not have come at a worse time. Just as the country was recovering from the <a href="https://www.nepalitimes.com/banner/the-real-cost-of-nepals-second-wave/" target="_blank" rel="noopener noreferrer">economic impact of the pandemic</a>, it was hit by extreme rainfall this month which killed more than 110 people across the country, and destroyed up to one-third of the country’s ready to harvest rice crop.The Ministry of Agriculture estimates that nearly 90,000 hectares of rice fields were severely damaged by <a href="https://www.nepalitimes.com/latest/post-monsoon-rain-ruins-nepals-crops/" target="_blank" rel="noopener noreferrer">the unseasonal post-monsoon rains</a>, and paddy losses will amount to more than Rs8 billion. Lumbini Province is said to have suffered the worst, with more than half of the initially reported damage nationwide.The unprecedented destruction comes just as farmers and officials were optimistic about a healthy rice harvest because of a healthy monsoon season. Rice is such an important component of Nepal’s economy that it will impact on the GDP, economic growth, and have a knock-on effect on the trade deficit because more rice will now need to be imported.Last year Nepal produced 5.6 million tonnes of rice from 1.4 million hectares of paddy fields, up 1.3% from the previous year. However, rising income levels of Nepalis has also meant that rice consumption is growing, and the country had to import Rs 51 billion worth of rice last year, compared to only Rs23 billion in 2019.Analysts say the <a href="https://www.nepalitimes.com/here-now/are-nepalis-really-eating-more-rice/" target="_blank" rel="noopener noreferrer">sharp increase in rice imports</a> cannot be attributed only to rising consumption, explaining it by the rise in demand from Nepal’s breweries and the dramatic rise in domestic beer consumption.

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Nepal’s remittances, forex reserves drop

<figure><img width="3000" height="1405" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110161128/636d18f59c7e80680e0ac7f3jpeg.jpg" alt=""/><figcaption>Photos: RSS</figcaption></figure>Still reeling from a <a href="https://www.nepalitimes.com/banner/after-the-deluge-in-nepal/" target="_blank" rel="noopener noreferrer">disastrous monsoon season</a>, Nepal has been hit with unseasonal downpours that have dumped more rain on rice crops that were ready for harvest across the country.. More than 100mm of rain fell in 24 hours in most parts of western Nepal, which has been the worst affected so far as a late-monsoon depression from the Bay of Bengal was swept into the Himalaya by a westerly system.The Indian state of Uttarakhand and Nepal’s Far-Western Province on either side of the Mahakali River have been badly affected by floods, landslides and submerged rice fields.The border Mahakali River reached record-high levels on Tuesday, destroying roads and bridges. More than 24 people are feared dead in a village in Bajhang hit by a landslide. Another andslide killed two children Dharan. <figure><img width="432" height="324" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110161128/636d18f79c7e80680e0ac7f4jpeg.jpg" alt=""><figcaption></figcaption></figure><figure><img width="1800" height="1350" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110161128/636d18fa9c7e80680e0ac7f5jpeg.jpg" alt=""><figcaption></figcaption></figure><figure><img width="1134" height="629" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110161128/636d18fe9c7e80680e0ac7f6jpeg.jpg" alt=""><figcaption></figcaption></figure>Nepal received 15% more rain than average this monsoon, which officially ended two weeks ago, according to the Department of Hydrology and Meteorology. The increased precipitation, including in <a href="https://www.nepalitimes.com/banner/himalayan-floods-a-sign-of-worse-to-come/" target="_blank" rel="noopener noreferrer">Manang valley</a> in Nepal’s rain shadow brought with it flashfloods that caused major damage in seven hydropower plants, and Nepal’s most expensive project for supplying water to Kathmandu <a href="https://www.nepalitimes.com/banner/still-chasing-the-melamchi-mirage/" target="_blank" rel="noopener noreferrer">Melamchi Water Supply</a>.Except in the landslide-hit areas, farmers across Nepal had been encouraged by a healthy monsoon and were looking forward to a bumper rice harvest. Early reports said standing crops were submerged, and harvested rice stalks were destroyed right across Nepal.Many roads in the country have been blocked due to floods from the continuous rain, including the Butwal-Bardaghat section of the East-West Highway. Water levels in the Mahakali, <a href="https://www.nepalitimes.com/banner/the-karnali/" target="_blank" rel="noopener noreferrer">Karnali</a> and Seti rivers in western Nepal have risen to dangerous levels, putting riverside settlements at risk, with many villages on the banks inundated. <figure><img width="3600" height="1667" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110161128/636d19019c7e80680e0ac7f7jpeg.jpg" alt=""><figcaption></figcaption></figure><figure><img width="3092" height="2061" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110161128/636d19069c7e80680e0ac7f8jpeg.jpg" alt=""><figcaption></figcaption></figure>Two hundred houses in the Bhimdatta and Dodhara Chandani municipalities near the Indian border in Far-Western Province are reported to have been flooded.According to the Department of Water and Meteorology, 196 out of 225 rainfall measurement centers in the country have recorded heavy rain in the past few days.Senior meteorologist of the Department, Pratibha Manandhar explains: “The low-pressure systems in central India and the Bay of Bengal moving north and the westerly winds becoming active is the reason we are experiencing such heavy rainfall so late in the season.”Generally, anything more than 100mm of rain within 24 hours is considered to be extreme precipitation. In the Far-western Province, Dadeldhura has already recorded 211mm of rainfall in the past 24 hours, Dipayal received 166mm in a sustained cloudburst, Ghorahi got 133mm, and Bhairawa 112mm. (see map, below) In Nepal, <a href="https://www.nepalitimes.com/opinion/a-disaster-resilient-nepal-is-possible/" target="_blank" rel="noopener noreferrer">monsoon rains</a> usually stop by the end of September, as the prevailing winds switch direction to blow in from the west. Climate experts are surprised by just how erratic this year’s monsoon has been.  <figure><img width="1128" height="578" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110161128/636d190a9c7e80680e0ac7f9jpeg.jpg" alt=""><figcaption>Total rainfall between 8:45 AM 18 October to 8:45AM 19 October in various parts of Nepal. Red areas show highest precipitation in western Nepal. Source: DEPARTMENT OF HYDROLOGY AND METEROLOGY</figcaption></figure>Water expert Madhukar Upadhya writes on his Twitter account: ‘As soon as we were saying that monsoon has ended, I find it surprising to see such high levels of rain, even capable of causing loss of life and property.’However, Manandhar from the Department of Water and Meteorology says that this kind of post-monsoon period is not unprecedented. She says: “There are weather variations from year to year, so it is not surprising to see rains so late into the season. Usually we get post-monsoon rains when the monsoon itself has heavy precipitation.”  The Department predicts more rain till Wednesday evening especially in Lumbini, Karnali, the Far Western Province, and in many places in Province 1, and gradually diminishing by the end of the week as the westerlies hold sway. However, a few places are still expected to see thunderstorms, strong winds, and heavy rainfall.This untimely rain has severely impacted on the <a href="https://www.nepalitimes.com/banner/the-rise-of-rice-in-nepal/" target="_blank" rel="noopener noreferrer">country’s rice harvest</a>. Madhav Prasad Poudel from the Department of Agriculture, says, “Unseasonal rain like this affects both standing crops and also those that have been cut and are left in the fields to dry. The water makes even the straw rot.”   <figure><img width="1500" height="1015" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110161128/636d190d9c7e80680e0ac7fajpeg.jpg" alt=""><figcaption>Satellite radar image taken on Tuesday at noon of heavy precipitation over northern India and Nepal. The westerlies are now pushing the system to the west, and the Department of Hydrology and Meteorology says the rains will taper off by Wednesday afternoon.</figcaption></figure>Although the Met Department forecast rain, the information did not reach farmers. Poudel adds that the rain has affected the paddy harvest adversely, but the exact damage has not yet been determined. Sitaram Chaudhary, a farmer from Dhangadi, said that the floods have severely affected the quality of paddy, rice, and straw and even vegetable farms. The government had been predicting records harvests of rice this year because of the favorable monsoon, but this week’s deluge may affect those hopes. This also puts tens of thousands of farmers at the risk of food insecurity. However, agriculturist <a href="https://www.facebook.com/rajendra.uprety" target="_blank" rel="noopener noreferrer">Rajendra Uprety at the Ministry of Agriculture of Province 1 </a>says the damage from rains may have been exaggerated, and Nepali farmers are used to dealing with heavy rains and high winds affecting ready to harvest rice crops.  "Of course, there has been damage, but there are ways to salvage rice stalks even from submerged fields," he says, "wet stalks need to be kept in a dry place, the paddy fields need to be drained, and the still standing crop should be harvested only after the rains stop. And we should all be helping each other instead of spreading alarmist information." Rice is grown in over 1.4 million hectares in Nepal. Last year, the country produced over 5 million metric tons of paddy, but <a href="https://www.nepalitimes.com/here-now/are-nepalis-really-eating-more-rice/" target="_blank" rel="noopener noreferrer">still imported about Rs51 billion worth of rice</a> to meet growing demand. With this week’s late monsoon floods and unexpected rain, the 2021 harvest is most likely to be below target.

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Nepal’s remittances, forex reserves drop

Post-monsoon rain ruins Nepal’s crops