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Fall Of Indian Rupees Against US Dollar
By KTM Metro Reporter
May 24, 2012: the Central bank of Nepal called Nepal Rastra Bank has set the selling price of dollar at Rs 89.80 and buying rate of one US dollar at Rs 89.20 for today indicating how deep the Indian currency has dived in relation to the US dollar.
The Nepalese rupee is pegged to the Indian currency. So, the Nepalese currency also has dived down along with the Indian currency.
This is the right time for the Nepalese central bank in other words Nepal Rastra Bank to purchase Indian currency using the dollar. The Indian currency is sure to rise again. So, Nepal Rastra Bank needs to take this opportunity to sell its dollar reserve to Indian Central Bank.
The high price of dollar has surely benefited the Nepalis working in the Middle East, and East Asia, as they get the high value for each dollar they sent home.
However, the prices of imports in term of dollar will cost more, and Nepal will need to pay high prices for petroleum products but most of the other goods imported from India will stay more or less at almost the same previous prices. More than 75% of the Nepalese trade is with India. So, the inflation in Nepal would be as much as in India due to the high dollar value.
At the same time, Nepal Rastra Bank has stated that the consumer price index increased by 7.5 per cent in mid-April 2012 as compared to 10.6 per cent in the same period of the previous year. The index of food and beverage group and non-food and services group went up by 4.6 per cent and 10.1 per cent respectively during the first nine months of the current fiscal year, according to a Nepal Rastra Bank (NRB) report, ‘The Rising Nepal’ of today reports.
The overall Balance of Payment (BoP) registered its highest ever surplus of Rs. 91.37 billion during the nine months of the current fiscal year 2011 compared to a deficit of Rs 14.94 billion recorded in the corresponding period the previous fiscal year. The rise in the growth of remittance and foreign grants along with improvement in the service account was the responsible factors for the substantial surplus in the current account. The remittances increased by 36.5 percent to Rs 248.18 billion in the first nine month while tourism income increased by 28.9 percent in the review period according to the news posted on nepalnews.com.
