Rupee weakens, gold drops, NEPSE down

KATHMANDU, Feb 28: Nepali currency vis-à-vis US dollar weakened to record low over the week, as the greenback appreciated against the Indian rupee, to which the Nepalese currency is pegged. Decline in international gold prices dragged the price of yellow metal down in the domestic market, while the country’s sole stock market also lost 26.58 points during the week. [break]

Currency

The partially-convertible Nepali rupee weakened by Rs 1.38 against the US dollar over the week, and was exchanged at record low of Rs 81.68 per dollar on Friday. Previous record low was Rs 81.10 per US dollar, about three months ago.

Nepal Rastra Bank, the central bank, had fixed the dollar’s selling rate at Rs 80.30 on Sunday. The rupee gained about 35 paisa against the greenback on Monday, but fell back instantly on Tuesday when it was exchanged at Rs 80.20 per dollar. On Friday, the US dollar was exchanged at Rs 81.68.

The rupee weakened against the euro by Rs 2.64, and closed at Rs 103.76 per euro (€) this week. It depreciated against the pound sterling (£) by more than two rupees and closed at Rs 116.32 per pound this week. As per the existing open-market exchange rate policy, rates quoted by different banks could differ.

Bullion

Gold price weakened by Rs 86 per gram over the week, and was traded at Rs 24,690 per 10 grams in the local market Friday. Bullion dealers attributed the decline to increase in the value of dollar against the major rival currencies in the wake of the announcement of new relief package by the US President Barack Obama.

The market had opened at Rs 25,550 per 10 grams on Sunday. It continued to slide through the week, landing at Rs 25,120 per 10 grams on Wednesday and Rs 24,690 on Friday.

Likewise, the price of silver also dropped to 350 per 10 grams from Rs 366 this week. Since Nepal fulfills its domestic bullion demand from the international market, any fluctuation in the prices in the global market is reflected in the domestic prices.

NEPSE

Nepal Stock Exchange (NEPSE) index dropped by 26.58 points over the week and closed at 677.52 points on Thursday, as investors lost confidence in the country’s sole secondary market.

As per a NEPSE statement, 276,821 shares changed hands at NEPSE’s floor at Rs 244.68 million this week, while the transactions last week had crossed over Rs 310.4 million. Transactions of shares belonging to Category A companies alone had touched Rs 191.9 million, which was 78.44 percent of the total transactions recorded during the week.

Of the major losers, commercial banks, the heavyweight group in the secondary market, and development banks recorded a sharp drop in their indices, which ultimately dragged the NEPSE index down.

NEPSE records show that commercial banks lost 27.86 points during the week. The index for development bank also recorded a drop of 66 points. Trading and insurance were the only two groups that had their indices going upward. Indices for manufacturing and hotels groups, on the other hand, remained unchanged throughout the week.