Kathmandu, Jan. 10 -- Nepal's foreign exchange reserves surged to an unprecedented Rs3.20 trillion by mid-December 2025-more than half of the country's gross domestic product (GDP)-underscoring a paradox at the heart of the economy: ample liquidity amid sluggish growth, weak investment and widening job deficits.

Economists say reserve levels now far exceed any plausible estimate of Nepal's liquidity needs.

Rather than reflecting robust economic performance, the swelling stockpile is being driven largely by soaring remittance inflows as young Nepalis leave the country in increasing numbers, while domestic consumption and investment remain subdued.

With low consumption or demand, the year-on-year inflation was stuck at 1.63 percent in mi...