Role of workers’ remittance seems to be an imperative part of Nepalese economy for about two decades. The remittances inflow has supported to maintain the foreign reserves at the national level and consumption in household level. This paper investigates the role of remittances in export performance of Nepal employing the gravity modelling approach using annual data for the period of 26 years, from year 1993 to 2018. First, we document the scenario of remittances and export nexus, then conduct an econometric estimation for the exports flows from Nepal to its trading partners. The major finding indicates that the remittances have a statistically significant negative impact on export performance, which is largely impacted by the size of the trading partner’s economy as indicated by the estimation’s results. The study suggests for an urgent attention from policy makers to make the remittance in favor of exports by developing the export strategies. In this regard, a special focus on exporting to the rich economies may be a good way to boost the export performance of Nepal.

This paper investigates bank stability and its bank-specific, industry-specific, macroeconomic and institutional determinants for the Nepalese banking industry. The study employs the system GMM to a panel of bank-level data covering the period from 2004-2018.  The results show that the stability of the Nepalese banking industry improved during the early years of the study period, i.e., 2004-2007; however, it exhibited a decaying trend for the rest of the study period. The analysis reveals that the major factors responsible for this deterioration are capital adequacy, asset quality, and earnings of the banks. Most of the dimensions have shown improvements during the initial years of the study period; however, this trend reversed post-2007. The study groups the banks into three categories: stable, moderately stable, and less stable banks as per their respective stability score. The estimation results indicate that a positive bank stability persistence exists in the Nepalese banking industry. Results suggest that credit growth has a negative impact on the stability of the banks. The results of the study support the concentration-stability hypothesis. Income diversification appears to have a positive impact on the stability of the banks. Findings disclose that inflation is playing a crucial role in impacting the stability of the banks. The study reveals that the GFC had no significant impact on the stability of the Nepalese banking industry.

This paper attempts to determine the impact of remittance on rural poverty in Nepal using the microdata set of household risk and vulnerability survey 2016 – 2018. The cross-sectional analysis has been carried out using a dataset of 2018 with 5,645 households across 50 districts of Nepal. The logit regression model has been used to determine the relationship between poverty and remittances. About 38 percent of rural households received remittances in 2018. About 65 percent of households headed by females received remittance compared to 30 percent of households headed by male counterparts. About 41 percent, 31 percent, and 32 percent of households living in the Hilly region, Terai, and Himalayan region respectively received remittance in 2018. About 1 in every 5 households in rural Nepal are poor. The probability of households falling into poverty reduces by 4.8 percent with a one percent rise in household assets. Remittance receiving households are 2.3 percent less likely to get caught in poverty as compared to remittance non-receiving households. The probability of households plunging into poverty decreases by about 1.1 percent with every 10 percent increase in remittance inflows to households.