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Currency Price And Economy
By KTM Metro Reporter
September 20, 2012: the Nepalese currency has been strengthening against US dollar after weakening to Rs 90 to a dollar in June 2012. The weakening and strengthening of Nepalese currency have been not independent phenomena maneuvered by the Central Bank of Nepal but the phenomena have been due to the weakening and strengthening of the Indian currency. The weak Indian economy caused by the slow growth and the high inflation caused by the high fuel prices and the wrong polices adopted by the former Indian finance minister have been the reasons for the weakening of the Indian currency and subsequently the Nepalese currency, as the Nepalese currency is tied to the Indian currency at the Nepalese 160 to the Indian 100. So, the Nepalese currency moves up and down following the Indian currency. Current Indian finance minister has changed the outdated financial polices and improve the Indian economy causing to strengthen the Indian currency.
Weak currency means Nepalis working-abroad get more Nepalese rupees for each foreign currency they earned. So, it is good for the Nepalis working abroad. Nepalese exporters also get more Nepalese money if their products are priced in US dollars. So, the chance of the Nepalese economy growing fast is high.
However, everything is not so good when the currency is weak. Nepalis needs to pay high prices for anything they buy in dollars. For example, they pay higher prices for the import of petroleum products. So, the high prices of fuel cause high prices of other products in the country. One thing Nepalis could do in this cause is not to import less important products. However, Nepalis would need to pay high prices even for the most essential goods such as fuel.
