Friday, October 7, 2022

Nepali Rupee plunges to a fresh low against US dollar

As the central bank fixed the exchange rate at Rs 132.02 per dollar for Saturday, and Sunday, the Nepali Rupee fell to a historic low against the US dollar.

The exodus of the Indian investors from Indian market and strong US economy has made the Indian rupee weakest in the history at Rs 82.33 Indian Currency (IC). As the Nepali rupee is pegged with the Indian currency, the Nepali rupee also fell to the historic low. The US dollar has been setting record high exchange rate continuously in the past two weeks. The Indian currency fell to a record low to 82.33 per dollar, down by 0.41 per cent, according to Economic Times, an Indian media.    

The US dollar has been stronger recently after the US Federal Reserve hiked its policy rate citing too-high inflation persisting in the US economy. 

The plunge of exchange rate of Nepali currency against the US dollar could help increase remittance inflow in the country, though there are more disadvantages compared to it. The increased remittance inflow will again be rerouted back as Nepal is the import economy, and imports most of the products paying the US dollar. It increases the market price also as the country imports most of the raw materials including the capital goods necessary to produce finished goods,” according to the economists.

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