Nepali rupee gains over Rs 2 against dollar

KATHMANDU, FEB 07 -

The US dollar has become cheaper against the Nepali currency, consistently over the last one month.  The value of US dollar has come down by Rs 2.62 in the last 25 days, coming down from Rs 87.90 on January 14, to Rs 85.28 on Thursday as fixed by the Nepal Rastra Bank (NRB).

Pegged with the Indian currency (IC), the value of the Nepali currency against the US dollar fluctuates in line with the movement of IC. On Wednesday, the US dollar was at its weakest against IC in the last three and half months as the greenback dipping to IRs 53.15.

The fluctuation in the value of US dollar has affected gold price heavily in the domestic market. The price of gold has been cheaper by Rs 300 per 10gm. On Wednesday, gold traders fixed the price of gold at Rs 48,100 per 10 gram, coming down by Rs 300 compared to the price on Tuesday.

With the wedding season on fullswing, the downfall in gold price has provided relief to the general public. The gold price had surged until a few days ago following the hike in customs duty on gold by Rs 700 per 10gam.

As the decline in the value of US dollar also reduces price of crude oil in the international market, it will help Nepal Oil Corporation to reduce its loss. With the dollar losing its strength, it will also reduce the price of imported goods, particularly those goods imported from third countries other than India. It also augurs well for foreign loan payment as the country should pay less whenever the domestic currency becomes stronger against the dollar.

Weakening of the dollar, however, may affect the remittance inflow as beneficiaries here get little in Nepali currency terms.