Nepali rupee weakens to a six-month low against US dollar

Published On: October 7, 2021 06:45 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Oct 7: The Nepali Rupee on Thursday depreciated to a six-month low against the US dollar with Nepal Rastra Bank (NRB) fixing the price of the American currency at Rs 120.27 per dollar for the day.

Earlier, the Nepali rupees hit a record-low at Rs 121.69 a dollar in April 2020. Last time, the exchange rate plunged to Rs 120.32 per dollar on April 26, 2021. Over the six-month period as of Thursday, the US dollar plunged as low as Rs 116.21 a dollar before taking an upward graph.

According to the media reports, the dollar price has been accelerating after the US economy gained recovery ensuring more employment opportunities to job-seekers. Due to this reason, the Nepali currency that is pegged with the Indian rupee has been affected with the falling graph of the Indian currency against dollar.

At a time when Nepal has been facing pressure on foreign currency reserves, the depreciation of its domestic currency could further worsen the country’s net inflow amount. In addition, it could raise the market price significantly as the country is dependent on imported goods.

According to NRB officials, the weakening of the domestic currency could prove to be a boon for remittances, tourism and exports, among other sectors where the earnings are in US dollar. However, Nepal is less likely to benefit from its export growth as it has a small basket of exportable items. 

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