Rupee weakens, gold soars, NEPSE recovers

KATHMANDU, Feb 20: Nepali currency weakened nominally vis-à-vis the US dollar over the week, as the greenback appreciated against the Indian rupee, to which our currency is pegged. While the sharp rise in international gold prices pushed the prices of yellow metal up in the domestic market, NEPSE also recovered about 30 points over the week. [break]

Currency

The partially-convertible Nepali rupee weakened by Rs 1.35 against the US dollar over the week, settling at Rs 79.75 per dollar on Friday.

Nepal Rastra Bank, the central bank, fixed the dollar’s selling rate at Rs 78.40 on Sunday. The rupee had appreciated against the greenback on Tuesday, when a dollar was exchanged at Rs 78.25. However, it continued to weaken in the later days and was exchanged at Rs 79.75 from Wednesday to Friday.

The rupee, however, gained against the euro by Rs 1.40, and closed at Rs 100.69 per euro (€) this week. It depreciated against pound sterling (£) by more than a rupee and closed at Rs 114.68 per pound this week. As per the existing open-market exchange rate policy, rates quoted by different banks could differ.

Bullion

Gold gained Rs 128.50 per gram over the week, and was traded at Rs 25,205 per 10 grams in the local market Friday. Bullion dealers attributed the rise to the sharp hike in the price of yellow metal in the international market.

The market had opened at Rs 23,920 per 10 grams on Sunday. Even though it dropped by Rs 4 per gram on Monday, gold prices shot up sharply by a daily average of Rs 500 for the next three days, creating a record of Rs 25,380 on Thursday. On Friday, however, the price came down to Rs 25,205 per 10 grams.

Likewise, the price of silver went up to 360 per 10 grams 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 gained about 30 points over the week and closed at 699.60 on Thursday as investors regained confidence in the country’s sole secondary market.

Mainly the rise in the trading of shares of commercial banks and subsequent rise in its index contributed to the market recovery this week, according to a NEPSE statement. NEPSE figures show that index for commercial banks had gained more than 42 points this week and had closed at 692.16 points.

As per the NEPSE’s statement, the index for development banks gained more than 13 points and closed at 981.28 points. The indices for finance and insurance groups also recorded a double-digit rise during the week.

Likewise, the indices for hydropower and other groups also went up during the week. The indices for trading, manufacturing and productions, and hotels groups remained unchanged throughout the week.