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Kathmandu Wednesday July 04, 2001 Ashadh 20, 2058.
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Nepali rupee depreciates
Post Report
KATHMANDU, July 3 – The Nepali rupee today
plunged to 30 paisa vis-à-vis the US dollar and was traded at Rs 75.40 when market opened
Tuesday.
The depreciation of the currency comes as a
result of soaring demand of the greenback amidst speculation that the dollar would slide
in the days to come.
"The proposed revision in the exchange rate
was suggested by the commercial banks due to strong demand of the US dollar," said
Krishna Bahadur Manandhar, Chief Controller of Foreign Exchange Department, Nepal Rastra
Bank.
Furthermore, the prime cause for the slide of
the rupee is due to a slip in the Indian currency. Since Nepali currency maintains a fixed
exchange rate with Indian currency, any fluctuation in Indian currency is automatically
transmitted to Nepali market unless there is a cross exchange rate among Nepali rupee,
Indian rupee and dollar.
The depreciation of the Indian currency was as a
result of rising demand for greenback by Indian importers speculating a further
depreciation in the near future.
Nepali rupee has witnessed a series of
depreciation in the recent year. The rupee so far has depreciated by almost 30 per cent
since August 1997, when it started depreciating, after over one-and-half year of
stability, under the impact of contagious South East Asian currency crisis.
It underwent second round of depreciation in
March 1998, after Indian currency succumbed to mounting international economic sanctions
as a protest to India’s nuclear tests on March 11, 1998. The rupee ever since has
remained largely unstable.
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