KATHMANDU: Nepal Rastra Bank (NRB) announced a record-breaking exchange rate of NPR 135.16 for one U.S. dollar on Thursday, marking the highest rate in the country’s history. In recent weeks, the Nepali rupee has been on a consistent downward trend against the dollar, setting new exchange rate records almost daily. On Wednesday, the rate stood at NPR 134.88 per dollar, while it reached NPR 134.89 on Tuesday. For Thursday, NRB has set the buying rate at NPR 134.56 per dollar.
According to NRB data, the Nepali rupee has depreciated by 0.4% against the dollar from the end of June to the end of September this year, compared to a 1.2% depreciation during the same period last year. The buying rate at the end of September was NPR 133.93 per dollar, up from NPR 133.36 at the end of June.
The rising value of the dollar globally is attributed to increasing demand in the world market. However, the U.S. presidential election initially slowed this expected rise as investors awaited the outcome. As of Wednesday, Republican leader Donald Trump has reportedly won the election against Vice President Kamala Harris, sparking a renewed investor interest in the dollar.
Analysts suggest that Trump’s victory has fueled optimism regarding the dollar’s status as a reserve currency, which he pledged to restore in his campaign manifesto. With Trump poised to return as president, investors anticipate policies aimed at strengthening the dollar’s reserve status, potentially leading to an increased dollar demand. This trend is expected to affect global gold prices, which could see a decline, according to Tej Ratna Shakya, former president of the Federation of Nepal Gold and Silver Dealers.
“Trump’s manifesto includes a commitment to reinforce the dollar as a reserve currency, and with his re-election, we expect the dollar to strengthen while gold prices may decrease,” Shakya noted. He added that any policy changes regarding the dollar under Trump’s administration will directly impact global gold markets.
Although fluctuations in the dollar’s value do not directly impact the Nepali rupee, the Indian rupee, which is pegged to the Nepali currency, is significantly affected. Given the fixed exchange rate between the Indian and Nepali rupees and Nepal’s heavy trade reliance on India, changes in the Indian rupee’s value consequently influence Nepal’s currency.
As of 11 p.m. on Wednesday, the exchange rate for one U.S. dollar against the Indian rupee reached INR 84.32. The Indian currency has been weakening against the dollar in recent weeks, setting a record high, which, in turn, has pressured the Nepali rupee.