The cost of domestic remittances ban

Rather than shutting down domestic remittance services entirely, the central bank should consider constructive reforms.

For many years, money sent by Nepalis working abroad has been central to both household livelihood and national financial stability. Remittances provide foreign exchange that strengthens the balance of payments, support consumption in households across the country, and help reduce poverty. In recent decades, these cash inflows have steadily outpaced traditional export earnings such as tourism, merchandise sales, and foreign investment. As recent data from Nepal Rastra Bank (NRB) show, total remittance inflows in Fiscal Year (FY) 2024-25 reached about Rs1,723.27 billion (approximately $12.64 billion). It marks a strong 19.2 percent increase over the previous year. Monthly remittance figures have crossed milestones, exceeding Rs200 billion in one month for the first time in history. It reflects the deepening reliance of Nepali families on these funds. International data confirms that Nepal is one of the most remittance-dependent countries in the world, with remittances accounting for a substantial share of its economy. In 2023, internationally reported figures indicated that remittances represented about 26.6 percent of the GDP.