KATHMANDU: The value of the US dollar has reached a record high in the Nepalese market. Nepal Rastra Bank has fixed the buying price of one US dollar at Rs 133.66 and the selling price at Rs 134.26 for Thursday (today). On Wednesday, the buying price of the dollar was fixed at Rs 133.61 and the selling price at Rs 134.21.

The value of the US dollar set for Thursday is the highest ever, breaking Wednesday's record. After being stable for a few weeks, the value of the dollar started to rise on Tuesday following the announcement of the Indian government's budget.

Indian media mentioned that the Indian rupee (INR) is weakening compared to the US dollar after India increased the capital gains tax through the budget. On Tuesday, the exchange rate of the US dollar in India was INR 83.71, while on Wednesday, it was INR 83.72.

Since the Nepalese (NPR) is pegged with the Indian currency, the value of the dollar in Nepal is determined based on the price set in the Indian market. As a result, when the Indian currency weakens, the Nepalese rupee also weakens. In the Nepali market, commercial banks are trading the US dollar at a selling rate of Rs 134.25 per US dollar on Thursday. Standard Chartered Bank has the lowest selling rate at Rs 134.15 per dollar.

According to the open market exchange rate management protocol, commercial banks can set exchange rates different from those set by the NRB. Banks have been fixing the exchange rate every day based on the international market and the rate determined.

Deputy Spokesperson for the Nepal Rastra Bank, Dr. Dilliram Pokharel, shared that when the dollar is expensive, the inflow of remittances, export of goods and services, and income from tourists will increase. However, more money will have to be spent on the import of goods and services and interest payments on foreign loans, putting pressure on foreign exchange reserves. He added that the external economic indicators at present are strong and imports are also decreasing, so it won’t have a significant impact on the economy.

Lately, as the remittance inflow is good in Nepal, foreign exchange reserves are also increasing. According to NRB data, the remittance inflow increased by 19.3 percent to Rs 132.75 billion as of May 14 in the last fiscal year. By mid-May, foreign exchange reserves reached Rs 196.71 billion, the highest so far according to NRB.