Kathmandu, March 17
The Nepali Rupee has reached its highest value for over a year against the Dollar.
According to the Nepal Rastra Bank’s rate, banks now sell one dollar at Rs 105.2 and buy the same at Rs 104.42.
The Dollar was the strongest against the Rupee in January this year when banks were buying the greenback for Rs 106.67 and selling at 107.27. The selling rate had on many occasions fallen to Rs 106, but this is the first time that it has touched the Rs 105 mark.
The weakening of the Dollar comes as the US Federal Reserve on Sunday announced an unexpected hike in its benchmark interest rate by 0.25 percentage points. The figure now stands at 1 per cent. That is why the Dollar has lost value against other major currencies in the world, including the Indian Rupee, on whose value the Nepali Rupee is pegged.
On Thursday, the Indian Rupee showed the strongest performance against the US currency in 16 months. A dollar in in the international currency market could get as much as Rs 65.41. Analysts believe that the strengthening of the Rupee is a short-term phenomenon, and the Dollar will slide back to INR 66.5-67.5 by the end of the year.
On Friday morning, meanwhile, reports indicate that fresh demand for the US currency has increased, and it has gained some strength over the Rupee. One unit of the Dollar is being sold at around Rs 65.65, reports suggest.
Impact on Nepal
When the Dollar loses value, remittances coming to Nepal are affected; recipients get less Nepali Rupees for every unit of foreign currency sent. Migrant workers could be discouraged to send money home as they try to wait out the slump in the strength of the greenback. Meanwhile, imports financed with dollars will, however, become relatively cheaper in the Nepali market if the trend continues.
