KATHMANDU, Oct 24 - The Nepali rupee has further plummeted against the US dollar to stand at a historic Rs. 80-mark with deepening fears of a global recession increasing the demand of the greenback in the Indian market.
The partially convertible Nepali rupee that is pegged with the Indian currency lost another 70 paisa overnight. Nepal Rastra Bank (NRB), the country’s monetary authority, has fixed a selling rate of Rs. 80 for a US dollar for Friday’s trading. NRB’s selling rate for Thursday’s trading was Rs 79.30. After the tumble, the Nepali rupee has depreciated by around 25.3 percent this year. The selling rate of the Nepali currency was Rs 63.85 on Jan. 1.
According to the online edition of The Economic Times, fears of increased capital outflows continued to weigh down on the rupee sentiment. In an attempt to tame the falling Indian currency, the Reserve Bank of India is estimated to have sold up to $2 billion on Thursday. Following the global financial crisis that began with the bursting of the housing bubble in the US, there has been a whopping outflow of US dollar from India, amounting more than US$ 35 billion.
Gold price slips
The gold price further dipped in Nepal by a record Rs 690 per ten grams Thursday on the back of weaker demand for the yellow metal as the greenback has kept strengthening against all major currencies and investors have kept on rushing to sell their bullion to pay losses in equities. The dollar and gold generally have an inverse relationship as the two compete for speculative funds.
According to Nepal Gold and Silver Dealers’ Association, ten grams of gold was traded at Rs. 19,500 Thursday against the Rs. 20,190 that the market saw on Wednesday. The price of ten grams of gold was Rs. 20,705 on Tuesday.
Stock revives
Defying stock crashes worldwide, the NEPSE index further gained 5.33 points to close at 919.33 at Nepal’s only secondary market Thursday. The banking sector, which holds the lion’s share at NEPSE, rose by 6.78 points, as most of the commercial banks were successful in raising their share values during Thursday’s trading. Likewise, the share values of the development bank and finance company sectors also rose. But, the hydropower and other sectors saw their share prices go down.
