Yesterday, the value of USD 1 climbed to the height of Rs 124.41 on Wednesday, May 18.
On the day, Nepal Rastra Bank (NRB) fixed the buying rate for one US dollar at Rs 123.84 and the selling rate at Rs 124.44.
The value of the USD is heightening due to the ongoing Russia-Ukraine conflict. The conflict has weakened the value of the Indian Rupee. As Nepalese currency is pegged with Indian Rupees, the Nepalese currency has also weakened compared to the USD.
Appreciation of the dollar will increase the value of remittances sent home by migrant workers and income from export. However, as the export volume of Nepal is nominal, it will not be able to get adequate maximum profit from this.
The appreciation of the dollar will also hit the development works and increase its cost as the country imports most of the machinery and other equipment from foreign countries.
Appreciation of the US dollar would also trigger inflation and deplete foreign currency reserves badly as Nepal’s import is very high compared to export. Devaluation of exchange rates will create an additional burden on the balance of payment.
