September 20: The value of the US dollar in the Nepali market has reached a record high. Nepal Rastra Bank fixed the buying rate of 1 US dollar at Rs 132.94 and the selling rate at Rs 133.54 on Tuesday. For Wednesday too, the central bank has continued the exchange rate fixed for Tuesday.
The dollar exchange rate set by the central bank for Tuesday and Wednesday is the highest so far. Earlier, the price of US dollar broke the previous record and reached Rs 133.14 in last October. After that, it decreased to around Rs 130 and started increasing again from last month.
As the Indian rupee weakened against the US dollar, the Nepalese rupee also weakened as the Nepalese currency is pegged to the Indian currency. Therefore, when the Indian rupee becomes weak, the Nepali rupee also becomes weak and when it is strong, the NC also tends to be strong.
Recently, the prices of US dollar, gold and petroleum products have been continuously increasing in the international market. There are both advantages and disadvantages in Nepal due to the increase in the value of the dollar.
When the dollar is expensive, the price increases everywhere in Nepal, from fuel, daily consumables, to large machinery and tools, which have to be imported. Due to the increase in the cost of transportation, the prices of common people's kitchens and other items such as clothes also become expensive. Big projects have to pay higher prices for imported machines and tools. This increases the cost of such projects.
The government's financial management responsibility increases as the interest and installments of the loans taken by the government from foreign donors have to be paid in dollars.
When the value of the dollar increases, families who receive remittances from abroad benefit. Their income increases. Exporters also benefit from this. As they receive export payments in dollars, their income and profits increase. In some cases, the government devalues the local currency to increase exports.
The tourism sector also benefits when the value of the dollar increases. As they also charge for the services they provide to foreign tourists in exchangeable foreign currency, especially in dollars, the tourism sector benefits when the local currency depreciates.
In recent times, foreign exchange reserves have increased due to good remittance inflow in Nepal. According to the data of Nepal Rastra Bank, as of July of the current fiscal year, foreign exchange reserves have reached Rs 1573.12 billion. Similarly, the country received remittance worth Rs 116 billion in the first month of the current fiscal year.
