USD hits new high against Nepali rupees


June 23, 2022


USD hits new high against Nepali rupees

KATHMANDU: The value of the United States Dollar (USD) has made a new contemporary record in Nepal with one USD trading for Nepali Rs 125.12 on Thursday.

The Central Bank, Nepal Rastra Bank (NRB), fixed the buying rate for one USD at Rs 125.12 and the selling rate at Rs 125.72 today.

The value of the USD has been going up due to the prolonged Russia-Ukraine conflict.

The conflict has depreciated the value of the Indian Rupee and concurrently the Nepali rupees, since Nepali currency is pegged with Indian currency.

This (appreciation of the dollar) in turn will increase the value of remittances sent home by migrant workers and income from export. However, it is hard for Nepal to capitalize on the USD value as export volume of Nepal is nominal.

The appreciation of the dollar is also also to affect development works and increase costs as the country imports most of the machinery and other equipment from foreign countries.

Appreciation of the US dollar would also trigger inflation and deplete foreign currency reserves badly as Nepal’s import is very high compared to export.

Devaluation of exchange rates will create an additional burden on the balance of payment.