Nepali rupee plunges lowest against US dollar

By A Staff Reporter Kathmandu, July 2: Exchange rate of the US dollar against the Nepali currency has been steadily rising, and on Friday the exchange rate reached the highest- Rs. 126.66 for one dollar.  The Nepali rupee plunged to an all-time low against the US dollar on Friday when the Nepal Rastra Bank (NRB) fixed the selling rate of one US dollar at Rs. 126.66.

Earlier on Thursday, the exchange rate of a dollar was Rs. 126.65 and it was Rs. 126.34 on Wednesday.  Under the current system, the exchange rates quoted by different commercial banks may differ, the NRB said.

Nepali rupee has continuously depreciated against the US dollar for the last few months and today it set a new record. In the last two months, Nepali rupee has depreciated by Rs. 4.07 per US dollar. On May 1, 2022, a dollar could fetch Rs.122.59.

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

The Nepali rupee has become weaker against the US dollar because of the recent Russia and Ukraine tension, said economist Dr. Chandra Mani Adhikari.

Owing to the present war between Russia and Ukraine, foreign investors are investing in dollar as secure and quality asset which has led to the rise of the value of the US dollar. 

Depreciation of the Nepali currency against the dollar will directly trigger inflation as import cost of goods will be higher, he added.

 “I think that rising value of the US dollar will affect the foreign currency reserve further as the foreign currency reserve of the country has already dropped significantly," he said.

The weakening of the domestic currency could prove to be a boon for remittances, tourism and exports, among other sectors where the earnings are in US dollar, he said. “However, the present war between Russia and Ukraine will affect the flow of remittance in the world, and Nepal will also be affected.”

Similarly, the tourism sector of the country has also been affected due to the impact of COVID-19 pandemic.