Oct 23 - Amid huge capital outflows by foreign funds in India, the Nepali rupee has plunged to a historic low against the greenback to Rs 79.30 on Thursday. The rupee’s previous low against the US dollar was in August 2002 when it dropped to Rs 78.60. Nepal Rastra Bank (NRB), the country’s monetary authority, has fixed a selling rate of Rs 79.30 for a US dollar for Thursday’s trading. NRB’s selling rate for Wednesday’s trading was Rs 78.94, The Nepali rupee, which is pegged with the Indian currency, has already depreciated by over 24 percent this year. A rupee was traded at Rs 63.85 on January 1.
According to the online edition of The Economic Times, the fall of the Indian rupee against the dollar was due to an increased demand for the dollar by importers and capital outflow of foreign funds. At the Interbank Foreign Exchange (Forex) market, the local unit, which remained steady at 49.00 on Tuesday, fell by 25 Indian paise to 49.25 against the greenback Wednesday.
The depreciation in the Nepali rupee, meanwhile, is good news for the country’s export sector, which has been going through a rough patch in recent years. However, it would also make imported goods and raw materials more expensive, thereby pushing the inflation further up. More importantly, the depreciation of the Nepali rupee will increase the country’s foreign debt repayment liabilities, which will put pressure on the government to manage additional resources this year.
Gold down Rs 515
The volatile international market has brought down gold prices in Nepal pushing it down Rs 515 per 10 grams on Wednesday.
According to the Gold and Silver Dealers Association (GSDA), prices of the precious yellow metal went down to Rs 20,190 per 10 grams on Wednesday from Rs 20,705 a day earlier. The price was Rs 20,360 per 10 gram Sunday.
The price of gold in international bullion market dipped to US$759 per ounce (31.11 grams) from US$797 per ounce. However, the silver price rose marginally to Rs 302 per 10 gram on Wednesday from Rs 300.
GSDA President Tej Ratna Shakya attributed the fluctuation to the current global financial meltdown.
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