KATHMANDU, Oct 13 - The Nepali rupee slipped to a six-year low against the US dollar following a record overnight loss of Rs 2.20, thanks to an astonishing gain by the greenback against the Indian rupee with which the Nepali currency is pegged.
Nepal Rastra Bank, the country's monetary authority, has fixed a selling rate of Rs. 77.90 for US$ 1 for Monday's trading. However, the rate may vary among commercial banks and other financial institutions as they are free to set their own prices.
The exchange rate of the dollar was fixed at Rs. 75.70 for Sunday, whereas it was Rs. 71.90 a month ago. This overnight rise of the dollar has been attributed to the tumble that the Indian rupee took, which was Indian Rs. 48.38 per dollar, amid heavy intervention by the central bank of India that sold up to US$ 2.5 billion to keep the rupee from falling further.
Demand for greenbacks rose sharply in the Indian market from domestic banks that wanted to fund their overseas commitments and foreign banks that wanted to gain from arbitrage by taking advantage of the rate differential between the spot and offshore non-deliverable forwards (NDF) markets, according to an online edition of The Economic Times.
The depreciation in the value of 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, and thus could fuel a price hike.Meanwhile, propped up by soaring international price and strengthening US dollar, price of gold has increased by Rs 810 per tola (11.664 grams) over a week.
According to Gold and Silver Dealers Association price of the precious yellow metal shot up to Rs 18,480 per ten gram on Sunday- the first day of trading after a long Dashain festival holiday from Rs 17,780 a week earlier.
Tej Ratna Shakya, president of the association, said deepening financial crisis across the world and mounting bullion price in the international market due to strengthening US dollar are the major factor to push up the price of gold in domestic market.
However price of silver has also edged down by marginally by Rs 4 per tola over the week from Rs 317 per tola.
