Dollar appreciated an all-time high against Nepali rupees

By A Staff Reporter Kathmandu, June 10: The exchange rate of the US dollar against the Nepali currency has remained strong so far.

The Nepal Rastra Bank has fixed the exchange rate of one US dollar at Rs. 124.68 for Thursday. The Nepali currency plunged to a record low against the US dollar today.

Earlier, the US dollar appreciated at its highest level against the Nepali rupee at Rs. 124.67 per dollar on May 20, this year.

Under the current system, the exchange rates quoted by different commercial banks may differ, the NRB said.

Nepali currency has come under pressure owing to the devaluation of the Indian rupee which it is pegged with. The Nepali rupee has a fixed exchange rate of Rs. 160 for IRs. 100.

According to economists, the US dollar is becoming stronger over the months due to the improvement of the US economy.

"As the US economy continues to recover, foreign investors are encouraged to invest in the US economy more than others, so the US dollar continues to strengthen around the world," economist Dr. Chandra Mani Adhikari said.

The main reason for the strength of the US dollar is the ongoing war between Russia and Ukraine as foreign investors continue to invest in the dollar as a safe and quality asset, he said.

The devaluation of Nepali rupee will directly hit inflation and foreign currency reserves as the government has to spend more Nepali rupees to pay foreign loans, he said. 

Inflation will be higher during such situation as the price of imported goods will be higher caused by a stronger dollar.