September 23, 2022 | Investopaper
Nepal Rastra Bank (NRB) has set an exchange rate of Rs 129.68 per US dollar for Friday. This is an all-time high exchange rate of dollar as compared to Nepali Rupees.
In recent days, the exchange rate of the US dollar against the Nepalese currency has been steadily rising. The dollar has risen by about Rs 27 in the last four and a half years. In December 2017, the price of one dollar was only 102 rupees.
Prices have also risen as demand for the dollar has soared in global markets. As the demand for US dollar in the world market has increased in the last few months, its effect is seen in Nepali currency.
There is a fixed exchange rate between Nepali Rupees (NRs.) and Indian Rupees (IRs). Along with fixed exchange rate, a large part of Nepal’s total foreign trade is dependent on India. Therefore, Nepali Rupees (NRs.) is also directly affected when the exchange rate of the Indian rupee fluctuates.
When the dollar strengthens, the inflow of remittances increases. Likewise, stronger dollar also has a positive effect on foreign direct investment (FDI). However, import dependent countries like Nepal have to pay higher price for imported goods and services.