Price of US dollar continues to rise, hitting record high at Rs 133.70

Published On: November 26, 2023 02:45 PM NPT By: Republica | @RepublicaNepal

KATHMANDU, Nov 26: The value of the US dollar has reached another historic high. On Wednesday, the exchange rate for one American dollar was fixed at Rs 133.68, but on Saturday and Sunday, it rose further to Rs 133.70.

According to Nepal Rastra Bank, the dollar has increased by 0.02 paisa compared to Wednesday. From August 18 to August 26, the dollar was continuously above the Rs 133 mark. The price of one US dollar, which was below Rs 133 from August 24 to September 5, reached Rs 133.17 on September 6.

Similarly, on November 11, 12 and 13, one US dollar was equivalent to Rs 133.65. The dollar, which reached Rs 133.68 on Wednesday, was traded at Rs 133.62 on Thursday and Rs 133.66 on Friday. On Saturday, the dollar increased by 0.04 paise compared to Friday, with the current trading rate remaining the same.

As the Indian Rupee weakens, the Nepali Rupee has depreciated. The Indian Rupee traded between INR 83.25 to 83.35 per dollar on Monday and today reached Rs 83.37. Indian media reports that the Indian Rupee has weakened against the dollar due to the outflow of foreign currency.

Imports are increasing in India. Foreign exchange reserves decrease when imports increase. As a result, the demand for the dollar has increased and the Indian Rupee has weakened. As there is a fixed exchange rate between the Nepali and Indian currencies, when the Indian currency weakens, the Nepali Rupee also weakens.

When the value of the dollar increases, it becomes more expensive to import goods. If the exports can be increased at a higher rate, then the rising value of the dollar will be beneficial. However, since the production cannot increase, the pressure on imports is increasing.

In the fiscal year 2022/23, Nepal imported goods and services worth Rs 1.62 trillion and exported goods and services worth only Rs 157 billion. Similarly, from Shrawan (mid-July to mid-August) to Ashoj (mid-September to mid-October) of the current fiscal year, imports have amounted to Rs 478 billion, whereas exports have been only worth Rs 40.87 billion. The depreciation of the Nepali Rupee against the US Dollar and weakened export performance are causing significant losses to Nepal.

Most of the Nepali industries are also based on foreign raw materials. If you have to import raw materials from abroad to produce goods, the price of the manufactured goods will be higher, placing a burden on consumers.