Rupee further weakened against dollar

Kathmandu February 24- – NRB on Thrusday set the exchange rate at Rs 110.28 per dollar for Friday. The domestic currency had been fixed on Rs 110 per dollar on Thursday while it was Rs. 109.68 in purchase rate. 

The Nepali rupee’s downswing has been attributed to a sharp fall in the value of the Indian rupee (IRs) against the greenback. Since the local currency is pegged with the Indian rupee, with a fixed exchange rate of Rs1.6 per IRs1, any fluctuation in the value of Indian currency has a direct impact on the Nepali currency. According to media reports, the plunge in IC is due to an increasing outflow of foreign investors from India’s capital market along with a rising demand for dollars from Indian importers. 

As Nepali currency continues to weaken, importers maintain their profit on imported goods from third countries by further pushing prices.   However, remittance inflow is also on the rise as a result of a weak domestic currency because people here receive more in Nepali rupees.