Nepali currency further depreciates with US dollar

By A Staff Reporter,Kathmandu, Sept.20: The Nepali rupee plunged to an all-time low against the US dollar on Tuesday. 

Nepal Rastra Bank (NRB) fixed the selling exchange rate of one US dollar at Rs. 133.54 for Tuesday while the buying rate of a dollar was fixed at Rs. 132.94.

The exchange rate of the US dollar against the Nepali currency had been steadily rising for the past few weeks.  

Earlier on September 8, 2023, the selling exchange rate of one dollar reached Rs. 133.44.

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.

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

The US dollar is becoming stronger in the international market due to an increase in its demand as foreign investors are investing in the dollar as a safe investment, said experts.

The depreciation of the Nepali currency with the dollar would directly hit inflation as it would push the import cost of goods up.

When the value of the dollar appreciates, the cost of foreign loans increases and exports become more expensive. The amount allocated in the budget to pay the loan and interest of the foreign loans may be insufficient after the dollar value soars.

The weakening of the domestic currency, however, could be a boon for remittances, tourism and exports, among other sectors where the earnings are made in the US dollars.

When the value of the dollar increases, the money sent by Nepalis working abroad will also increase.