The central bank reports that the National Urban Consumer Price Index (NUCPI) declined on a point-to-point scale in mid-September compared to mid-September 1999, mainly due to the decline in the prices of food and beverages. The NUCPI, which indicates national inflation rates, rose by only 0.3 percent compared to a corresponding rise of 5.6 percent a year ago, the Nepal Rastra Bank stated in its economic report for the second month of the fiscal year. The numbers, however, have not taken into account the increase in fuel prices in early October, which is likely to give the overall index a push.

On the trade front there has been a decline in the export of readymade garments, carpets and silver jewellery, while export of tanned hide, niger seeds and pulses is picking up. Exports during the second month of the fiscal year grew faster than imports, leading to a 10.2 percent drop in the trade deficit of Rs 8.54 billion.

The bank said the balance of payments (BoP) position, based on figures up to mid-July 2000 was a favourable Rs 14.28 billion, while the current account reported a deficit of Rs 5.62 billion?due mainly to a decline in service income and a huge trade deficit.