Although the rupee traded at a record low on Wednesday after the Nepal Rastra Bank issued the nominal exchange rate of Rs. 83.40 for the day, it has gained 15 paisa Thursday's trading set at Rs. 83.25 by the central bank.
Experts explain the rupee's depreciation to a fall in the Asian stock market and capital outflow from the Indian market.
The rupee has lost almost 19 percent of its value in the last one year, said Rajendra Pandit, deputy director of Nepal Rastra Bank. The nominal exchange rate of the dollar on Jan. 15, 2008 was Rs. 63.20 while it fell to Rs. 78.05 within a year. The Nepalese rupee had witnessed a rise of Rs. 13.27 during the seven months from August 2008 to the first week of March 2009. The rupee traded for Rs. 68.41 against the greenback in the first week of August 2008, slipping to Rs. 81.68 by the end of February this year.
In a clear indication of easy liquidation, 91-day treasury bills slipped to 5.71 percent from 7.39 percent last week. The Initial Public Offerings (IPOs) conducted by Citizens Bank Limited and the Bank of Asia led to a shortage of liquidity last week, Pandit said.
Meanwhile, the Indian rupee entered uncharted territory earlier this week, breaching the 52-rupee mark against the U.S. dollar and ending the day at Rs. 52.05, down from Monday's closing of Rs. 51.90 per dollar.
Foreign investors have sold Indian shares worth US$ 1.7 billion so far. In 2008, when the Indian rupee fell by 19.1 percent, they also withdrew more than US$ 13 billion.
