Tuesday, September 3, 2013

Rupee plunges to new low of 109.03 against US dollar

Nepali rupee further plunged to another record low of vis-à-vis greenback as the central bank has fixed the reference rate of Rs 109.33 for tomorrow.
However, the commercial banks traded the US dollar above Rs 110 as according to the liberal foreign exchange regime, the central bank only fixes the reference rates for buying ans selling of foreign currencies.
The volatile US dollar has made Nepali economy suffer as the imported goods have been more expensive with the US dollar getting stronger.
Today, US dollar was traded at Rs 106.06 and the rupee lost Rs 2.97 against the greenback over a night due to weak Indian rupee – with which Nepali rupee is pegged – has hit the lowest at around Rs 70.
On August 28 Indian rupee plunged to Rs 68.85 against the US dollar, pulling the Nepali unit also to the record low of 108.9 for August 29. However, the Indian rupee recovered to IRs 67.20 vis-à-vis US dollar giving a temporary respite.
Due to strengthening US dollar, the foreign investors have been taking their portfolio investment out of India putting further pressure on Indian rupee.
The expected better US jobs data, and improving US economy has been strengthening the US dollar, whereas Indian rupee has lost over 19.5 per cent against the greenback since the slide began in early May due to current account and budget deficits.

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