Rupee's downward spiral continues, trading close to Rs 94 against USD in int'l market

ShareSansar, June 11:

Nepali rupee’s downward spiral continued on Tuesday with latest international market reports showing the rupee trading at Rs 93.77 against a US dollar. Nepali rupee has fallen to a record low of Rs 92.93 against the dollar on Tuesday, stated Nepal Rastra Bank.

The sharp devaluation of the Nepali rupee is attributed to the drop in the value of the Indian rupee, with which the domestic currency is pegged. Indian currency fell to an all time low of Rs 57.98 against the dollar on Monday when the Nepali currency traded at 91.59 per US dollar.

The depreciation in Nepali currency will increase the cost of both imports and exports. Remittance receivers, however, stand most to gain from the devaluation of Nepali currency as they will get more Nepali rupee while exchanging every US dollar.  

Remittance flow into the country tends to go up when the Nepali currency depreciates as Nepali workers seize the opportunity to get higher returns in rupee terms.