The Downward Sloping of Nepalese Currency

           In current situation the value of the US dollar is increasing with the exchange rate of Rs 83.91 in December. The exchange rate of the dollar, a month ago was Rs 82.7819. So that Nepali currency lost over seven % against the US dollar. The increasing rate of US dollar does the fall on the value of the NPR. The NPR and the INR are directly and solely related since these two currencies are pegged. The investors are using dollar rather than euro as the safer currency.

            The Upward of US dollar in india lower the price of the INR value, so that has directly affects on the Nepalese economy. The increase in US dollar effects to our exports will benefit but on the other hands the imports of the Nepal will more expensive. So that the exports like ( Pasmina , Handicraft, Galaicha, etc) will get beneficial but the Imports like(cars, bike, petroleum, etc) will be more expensive. In the context of Nepal there is more imports than exports that’s why the economy have depreciative trade. And the increase of the US dollar rate makes the Nepalese economy in more loss.

            This also effects on the market too even the cheap Chinese goods will be more expensive than its previous price. The many of manufacturers imports raw materials that also make the high price of the goods that goes on the market. During the fiscal year, Nepal’s Imports from India stood at Rs 261 billion and at Rs 133.27 billion from third countries.

            The INR peg is still at the golden NPR 160 and the 2/3 of the Nepal’s imports from india is also being trade in INR. This import includes the petroleum from India and India imports approx 75% of its own petroleum requirement. So that the increased price will be transferred to Nepal while importing.

The US dollar also affects on the trade on gold too. Trading of gold is done in US Dollar when the US dollar goes up it means that buying dollar has become more expensive so gold goes down when the US dollar goes up and vice versa.

            There is the only beneficial part of the increased of US dollar, that the increase value of the remittance caused only the appreciation.

            Nepal is a third world country, the increase in US dollar depreciate the economy in loss. The exchange rate is increasing day by day so that the economy is going down and down. The NPR has been less valued currency. Country should focus to make valued it.