Rupee devaluation pushes gold price upward

KATHMANDU, July 23: Nepali currency devalued vis-à-vis US dollar over the first week of the new fiscal year, as the greenback enjoyed consistent gain against Indian rupee with which Nepali rupee is pegged. The devaluation, meanwhile, caused the prices of gold inch up in the domestic market.



Currency



Nepali currency shed 66 paisa against a US dollar this week, rendering imports expensive and raising income of exporters as well as remittance receivers. On Friday, a dollar was exchanged at Rs 75.75. [break]



A US dollar was sold at Rs 75.09 when the market opened this week on Sunday. As demand for the greenback jumped amid growing international prices, Nepali rupee went through consistent drop over the next three trading days.



For instance, rupee weakened against a dollar by 6 paisa on Monday and further 42 paisa on Tuesday. It again recorded overnight drop of 31 paisa on Wednesday. However, over the last two days of the week, rupee tried to regain its worth, strengthening against a dollar by 3 paisa on Thursday and further 10 paisa on Friday.



Nepali rupee, on the other hand, gained against euro as well as pound sterling. According to Nepal Rastra Bank, the monetary authority, rupee gained 12 paisa against a euro and 75 paisa against a pound sterling. On Friday, a euro was exchanged at Rs 96.72 and a pound sterling at Rs 114.87.



Bullion



Even as the international price of gold remained fairly stable, the price went up Rs 70 per 10 gram in the local market this week due largely to rupee devaluation. The yellow metal was traded at Rs 30,160 per 10 grams on Friday.



Nepal Gold and Silver Dealers´ Association, which sets prices of the yellow metal in the market, had opened the market with gold priced Rs 30,090 on Sunday. As domestic demand of gold continued to remain on low ebb, the price did not change on Monday. On Tuesday, gold price dipped by Rs 90 per 10 grams.



But gold regained shine over the next three days, with the prices jumping by Rs 110 per 10 grams on Wednesday and further Rs 50 on Friday.



The price of silver, meanwhile, remained unchanged in the local market. Silver was traded at Rs 483 per 10 grams on Friday.



As Nepal is totally dependent on international market for its domestic bullion demand, any fluctuation in the global market is directly reflected in the domestic market.

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