US Dollar Against Nepali Rupee Reaches All Time high; NPR stands at Rs.124.41 against USD

The US Dollar has stood at an all-time high as of today against the Nepali Rupee. The buying and selling rates of 1 USD reached NPR 123.81 and NPR 124.41 respectively. Likewise, the USD NPR was 123.63 (Buy) and 124.23 (Sell) yesterday.

The euro and the UK pound also strengthened on Wednesday. The buying rate of 1 euro on Tuesday was NPR 128.88, but on Wednesday the buying rate of 1 euro increased to NPR 130. 43. Also, the selling rate has reached NPR 131.06. The selling rate on Tuesday was NPR 129.51.

Similarly, the buying rate of the UK pound- sterling was NPR151.45 and the selling rate was NPR 152.18 on Tuesday. However, on Wednesday, it rose to NPR 154.50 and the selling rate stood at NPR 155.25.

According to NRB’s monthly report on the country's macroeconomic and financial situation, inflation has increased by 7.28% in April 2022. (Latest Update). The consumer price index in Nepal has also increased in 12 months, with an April figure of 147.34 %.

Rising US Treasury yields are a major reason for this. This is happening as inflation has risen above decades-old levels. When the dollar appreciates, it only benefits the tourism sector, exporters, and remittance senders. Although Nepal has some advantages in terms of remittances and exports, the price of imported goods seems to be high due to high imports. With prices rising, this is likely to put more pressure on.

Nepal must pay in dollars for imported goods. For this reason, there are more imports than exports in Nepal, so when the dollar appreciates, the import tax will be higher. This will make the prices of these items more expensive. As the dollar strengthens, so does the government's debt burden from foreign donors.