The value of the US dollar has hit a new high in Nepal. On Friday, Nepal Rastra Bank (NRB) set the selling price of the US dollar at Rs 134.15, surpassing the previous record of Rs 134.1 set on Jestha 30. The buying price for the general public is fixed at Rs 133.55.
The US dollar’s value increased by 31 paisa from the previous day, indicating a depreciation of the Nepali currency in international markets.
This rise in the dollar’s value has mixed implications for Nepal’s economy. On the positive side, the remittance and tourism sectors benefit as their earnings, valued in dollars, convert to higher amounts in Nepali rupees. This appreciation boosts the income of families reliant on remittances and makes Nepal more attractive to tourists.
However, the stronger dollar presents significant challenges for Nepal, especially in foreign trade. As a country heavily dependent on imports, a high dollar exchange rate worsens the trade deficit. Nepal imports goods worth approximately Rs 140 billion monthly, while exports average only Rs 13 billion. This substantial trade imbalance means that a stronger dollar inflates the cost of imports, including essential items like fuel and vehicles, leading to higher domestic prices.
The increased cost of imports puts pressure on Nepal’s foreign exchange reserves and contributes to inflation. Higher fuel prices escalate transportation costs, while the cost of domestic products reliant on imported raw materials also rises. Additionally, the cost of constructing various physical infrastructure projects increases, straining the economy further.
