IRs 100 fetching Rs 168 in black market

BIRGUNJ, SEP 18 -

High demand for the Indian currency (IC) catalysed by increased cross-border smuggling has sent the value of IC soaring in the black market.

Although the official exchange rate is Rs 160 per IRs 100, black marketers are charging as high as Rs 168 for IRs 100.

Traders attributed this surge in IC value in the black market to increasing smuggling of goods that created shortage of the currency. They said smuggling of sugar, food items, readymade garment and shirting and suiting, among others, has surged ahead of the festivals. Smuggling of motor parts, hardware and electronics are also on the rise.

Nepal Rastra Bank’s (NRB) Birgunj branch chief Upendra Kumar Poudel said increased cross-border anomalies were making the situation tough for the central bank to manage IC. The central bank provides IRs 720,000 per week to each exchange counter here.

On the receiving end are students and the general people who visit India for health treatment and for purchasing essentials. “People of rural areas are dependent on Indian markets for essentials. The rise in the value of IC has affected us badly,” said Nagendra Sah, of Pokharia, Parsa.

Birgunj Chambers of Commerce and Industry President Ashok Temani said getting IC notes has becoming a challenging job as goods are being imported heavily from India. On top of that, Indian tourists use cards instead of cash, he said.

Meanwhile, the trend of settling accounts through hundi for undervalued imports is on the rise. Importers send the quoted amount through letters of credit and the remaining amount is sent through hundi. People also use hundi to send money to India for insurance premium payment.

Increased imports targeting the festivals have also helped hundi flourish. Traders say hundi operators are charging as high as Rs 7,000 per IRs 100,000 sent to India. The rate was Rs 3,800 until a few months ago.

Source: The Kathmandu Post