For tomorrow, Nepal Rastra Bank (NRB) fixed reference exchange rate of Rs 98.12 as selling rate based on today’s forex trading of commercial banks. Likewise, buying rate is fixed at Rs 97.52.
The Indian rupee —with which Nepali currency is pegged—is gaining its footing against the US dollar due to its improving macroeconomic condition.
Its current account deficit has lately narrowed down from the alarming level, while the stock market has started attracting more foreign funds. These factors have worked in favour of the Indian rupee.
The Indian rupee is also becoming stronger because of the victory of the opposition party in state elections held since last month. The opposition party — Bharatiya Janata Party (BJP)— and its prime ministerial candidate Narendra Modi are considered business friendly and prospects of their victory in the general election have boosted the confidence in the Indian stock and forex markets.
Because of these reasons, the Indian rupee closed at IRs 61.13 today.
Due to troubles in the Indian economy and progress made by the US economy, Indian currency was hit badly that eventually forced Nepali currency to take a beating as well. Nepali rupee had crossed 100-rupee mark on August 20, reaching Rs 108.9 on August 29. It had remained at over 100-rupee mark till early October and has been bobbing near that level ever since.
Though things seem to have become better now, the possible tapering of the US Federal Reserve’s monetary stimulus before the end of 2013 is expected to hamper the ongoing Indian currency rally. Stronger dollar is desirable for exporters as their exports will fetch higher amount, while imports will become expensive in the domestic market.
-THT
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