Friday, June 22, 2012

Rupee further weakens against dollar

The Indian currency's free fall against the US dollar once again dragged down the Nepali currency to a new low today.
The exchange rate of the Nepali currency vis-a-vis the US dollar crossed Rs 91 for a dollar today on average as Nepal Rastra Bank determined Rs 91.28 for the exchange rate as buying rate for tomorrow based on today's forex trading.
The Indian Currency (IRs) with which Nepal's currency is pegged to has been taking a continuous beating against the US dollar and reached as low as IRs 57.30 in the forex market. Nepali rupee also went along with the slide due to the peg.
The US dollar's gains against the euro and other major currencies in forex markets amid global economic troubles along with Moody's downgrading of the world's 15 biggest banks has aided in the depreciation of the Indian rupee.
Likewise, strong demand for dollar from oil importers and increased capital outflows from India further dampened the Indian rupee. To halt the free fall, Reserve Bank of India has directed state-owned oil firms to buy half of their dollar requirements for oil imports from a single public sector bank.
Though a weak currency is generally bad news for any country, Nepal's foreign currency reserve has swollen thanks to the recent depreciation run.
In the 10th month of the current fiscal year, Nepal's surplus in its balance of payments crossed Rs 100 billion mostly due to increased remittance inflow by 36.5 per cent to Rs 282 billion on the weak Nepali rupee.

No comments: