The Nepali rupee (NPR) has reached its weakest position ever against the US dollar, as the dollar continues to strengthen globally. According to Nepal Rastra Bank, the selling rate of one US dollar is set at NPR 137.16 for Saturday and Sunday, the highest exchange rate recorded so far.
Just last Friday, the rate stood at NPR 136.73. Over the past weeks, the rupee has consistently weakened, setting new records for the exchange rate daily. Nepal Rastra Bank reported a 1.02% depreciation of the rupee against the dollar by the end of November, compared to a 1.18% depreciation during the same period last year.
In late November, the buying rate of one US dollar reached NPR 134.74, compared to NPR 133.36 at the end of June. Despite fluctuations in the dollar’s value, the rupee is indirectly affected because of its fixed exchange rate with the Indian rupee (INR), which directly feels the impact. Since Nepal relies heavily on India for trade, any changes in the INR’s value also influence the NPR.
As of Saturday night, one US dollar was valued at INR 85.39, slightly down from INR 85.41 earlier in the week. Analysts attribute the strengthening dollar to its growing global demand, which has been rising since Donald Trump’s presidency. Trump’s policies and promises to develop the US dollar as a global reserve currency have increased investor interest, further boosting its value.
Impact on Nepal
A stronger dollar benefits Nepal in areas like remittances and foreign direct investment (FDI). With the dollar’s rise, Nepali workers abroad tend to send more remittances home, positively impacting the country’s economy. Improved remittance inflow and FDI help balance Nepal’s payments and boost savings. Sectors like tourism and exports also stand to gain if Nepal can leverage the situation effectively.
However, the downside includes higher costs for imports, foreign investments, and services such as education, travel, and medical treatment abroad. These factors could strain Nepal’s economy, making essential goods and services costlier for its citizens.