KATHMANDU, NEPAL
Nepali rupee has plunged to another record low against the US dollar, making it one of the worst performing currencies in Asia.
Nepal Rastra Bank, the central bank, has fixed Friday´s exchange rate at Rs 95.99 per US dollar, down Rs 1.74 from Thursday´s Rs 94.25.
Nepali rupee´s slump has continued unabated due to weakening of the Indian rupee with which Nepali currency is pegged.
Indian rupee had fallen to as low as 59.98 per US dollar on Thursday before closing at 59.57, according to Reuters. Since exchange rates in Nepal are fixed on the basis of Indian rupee´s exchange rate vis-à-vis the greenback, any fluctuation in the value of Indian currency affects exchange rates in the country as well.
Indian rupee has lately been losing ground as foreign institutional investors are pulling out of the country due to concerns over tapering of quantitative easing in the US which had funneled billions of dollars into the global financial system.
Although India tried to curb freefall of the currency on Thursday by saying “the government was not short of options to tackle the rupee´s fall”, its inability to explain “how” triggered further selloff.
The latest fall in value of Nepali rupee is expected to fuel inflation as Nepal is virtually a net importing country. This means Nepali traders will have to spend more of the domestic currency while purchasing US dollars to settle trade payments.
However, Nepal Rastra Bank (NRB), the central bank, has said consumers prices will not go up in a significant manner as Nepal imports most its goods from India.
“Nepal imports around two-thirds of goods from India, payments of which are made in Indian currency. Since the central bank will make Indian currency available at the same old rate to traders, we don´t think import payments will go up and cause consumer prices to rise,” NRB Spokesperson Bhaskar Mani Gnawali had told Republica on Wednesday.
Although what Gnawali said is valid, prices of goods imported by India and exported to Nepal, like petroleum products, will go up.
However, weaker Nepali currency is expected to benefit exporters and remittance receivers, as they will get more Nepali rupee while exchanging US dollars.
Source: myrepublica, 21st June 2013
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Nepali rupee has plunged to another record low against the US dollar, making it one of the worst performing currencies in Asia.
Nepal Rastra Bank, the central bank, has fixed Friday´s exchange rate at Rs 95.99 per US dollar, down Rs 1.74 from Thursday´s Rs 94.25.
Nepali rupee´s slump has continued unabated due to weakening of the Indian rupee with which Nepali currency is pegged.
Indian rupee had fallen to as low as 59.98 per US dollar on Thursday before closing at 59.57, according to Reuters. Since exchange rates in Nepal are fixed on the basis of Indian rupee´s exchange rate vis-à-vis the greenback, any fluctuation in the value of Indian currency affects exchange rates in the country as well.
Indian rupee has lately been losing ground as foreign institutional investors are pulling out of the country due to concerns over tapering of quantitative easing in the US which had funneled billions of dollars into the global financial system.
Although India tried to curb freefall of the currency on Thursday by saying “the government was not short of options to tackle the rupee´s fall”, its inability to explain “how” triggered further selloff.
The latest fall in value of Nepali rupee is expected to fuel inflation as Nepal is virtually a net importing country. This means Nepali traders will have to spend more of the domestic currency while purchasing US dollars to settle trade payments.
However, Nepal Rastra Bank (NRB), the central bank, has said consumers prices will not go up in a significant manner as Nepal imports most its goods from India.
“Nepal imports around two-thirds of goods from India, payments of which are made in Indian currency. Since the central bank will make Indian currency available at the same old rate to traders, we don´t think import payments will go up and cause consumer prices to rise,” NRB Spokesperson Bhaskar Mani Gnawali had told Republica on Wednesday.
Although what Gnawali said is valid, prices of goods imported by India and exported to Nepal, like petroleum products, will go up.
However, weaker Nepali currency is expected to benefit exporters and remittance receivers, as they will get more Nepali rupee while exchanging US dollars.
Source: myrepublica, 21st June 2013
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Minimum Wage in Nepal increased to Rs.8,000 per month
Nice information.
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