Nepal owes Rs 351b in external debt

Nepal’s external debt rose by one percent to Rs 351.77 billion during the first quarter this fiscal year while internal debt position remained unchanged.

During the first quarter, the country received Rs 8.5 million in external debt, while the government did not raise domestic debt as its treasury held a massive amount for unspent budget.

The internal debt has now remained unchanged at Rs 206.68 billion from the end of last fiscal, according to a quarterly report about the country’s debt situation prepared by Financial Comptroller General Office (FCGO). According to the report, external debt now constitutes 63 percent of the country’s total debt amouting to Rs 558.45 billion.

Of the total external debt received during the first quarter, bilateral sources contributed Rs 5.3 billion (62 percent) of the total debt.

Although the country has sought to raise a total of Rs 52 billion in internal debt, massive resources with the treasury has stopped the government from raising it further.

The country treasury currently holds Rs 70 billion. “In the last fiscal year, we did not raise internal loan worth Rs 25 billion although we had planned to raise Rs 44 billion,” said Krishna Devkota, ministry spokesperson. “We are facing similar situation this year too as we have failed to spend development budget like the previous year.”

“Spending the resource has been a big challenge for the government,” he added.

As far as debt servicing is concerned, Nepal paid off Rs 5.5 billion during the first quarter and Rs 3.8 billon to external creditors. The external creditors received Rs3.2 billion in principal repayment and Rs 590 million in interest.

With interest rate, usually being higher for domestic creditors, the internal creditors were paid out Rs 1.72 billion in interest. As of the first quarter, Nepal has the largest outstanding debt to be paid to the World Bank’s International Development Association (IDA), followed by the Asian Development Bank (ADB), among the multilateral donors.

Nepal has outstanding debt worth Rs 144 billion to IDA in Special Drawing Rights (SDR), a type of currency used by donor agencies, and another debt worth Rs9.5 billion in US dollar. The country has to pay Rs 146.73 billion to the ADB.

Nepal owes Rs 13.61 billion to Japan, the highest among bilateral creditors, followed by China’s Rs 10.35 billion.

Source: eKantipur