Consumer goods prices to rise as rupee falls

KATHMANDU:

With dollar getting stronger by the day compared to the rupee, prices of consumer goods are set to rise.

“Consumer items, mainly clothing and shoes, being imported from China are going to cost more, as Nepali importers pay through dollar denominated Letter of Credit,” says Himal Thapa, executive director of Nepal Trans Himalaya Traders. Most of the goods coming from India will also be expensive, as raw materials used in production of fast moving consumer goods to huge trucks have to be imported.

The prices of electronic gadgets, televisions and household appliances have already risen in the past few days by five to 10 per cent. “Prices of popular models of mobile phones and tablets have already increased, as new lots cost more due to rising dollars exchange rates,” according to Purushottam Basnet, president of Mobile Traders Association of Nepal.

That is not good news for those who wait for festive season offers to make purchases. Free fall of rupee against US dollar means that an item that could have been bought for Rs 88 a year ago will now cost Rs 103. Binita Shrestha, a homemaker and mother of three children aged between 11 and 17 years, says, “I am worried whether we will be able to provide new clothes and shoes for the kids in Dashain, because everything is going to be expensive.” Others affected are those who are planning a vacation abroad. Ajay Raj Joshi, an employee of a commercial bank, has cancelled his holiday plans to South East Asia during Dashain vacations.

Nepali students studying abroad will also have to shell out more for tuition, along with living costs. Parents of a student in an American undergraduate school that charges $15,000 will have to pay additional Rs 120,000 this year.

But the scenario is not bleak for everyone. Households with family members working abroad are glad to see the rising dollar. The first thing that 17-year-old Malini KC does these days when she gets a newspaper is check the exchange rate for American dollar. She gets elated to see the ever increasing rate, as her brother settled in the US has promised to send her $500 for Dashain and dollar’s value has increased 16 per cent in the last year.

Source: THT