Kashmir effect to pegged Nepali currency :falls further as Indian currency depreciates against dollars
Kathmandu : Nepali rupees has suffered continuous fall as it has depreciated further against US dollars for the last one month.
Nepal Rastra Bank (NRB) has fixed the selling rate of one US dollar at Rs.114.96 for Sunday while it has fixed the buying rate of a US dollar at Rs 114.36, according to the exchange rate report of NRB, The Rising Nepal reports.
Under the current system, the market exchange rates quoted by different commercial banks may differ, according to the NRB.
In a month, Nepali rupees depreciated by Rs. 3.69 per US dollar. As of July 25, 2019, a dollar could fetch Rs. 110.67.
Nepali rupee depreciation reached all-time low in October of 2018 as the value of Nepali rupee slid to 119.33 against a US dollar. But after a few weeks the value of Nepali rupee improved to Rs. 110 against a dollar.
According to NRB executive director Dr. Gunakar Bhatta, the value of the Nepali rupee has declined due to the depreciation of the Indian currency against the dollar.
“The devaluation of the Indian currency against the U.S. dollar has directly affected the Nepali currency as it is pegged to the Indian currency,” he added.
Nepali rupee has a fixed exchange rate of Rs 160 for IRs 100.
According to him, foreign investors who are investing in India were encouraged to withdraw their investment from the country due to Kashmir crisis resulting in the depreciation of Indian rupees.
He said that appreciation of US dollar against Nepalese currency would push inflation because the price of imported goods would increase following the depreciation of Nepali rupee.