Kathmandu, 6 Dec: Recently, the Nepali currency has been depreciating rapidly against the US dollar. Nepal Rastra Bank fixed the buying rate for Thursday at NPR 143.67 per US dollar and the selling rate at NPR 144.47. On Thursday, the buying rate reached an all-time high of NPR 144.01.
The depreciation of the Nepali currency is not due to Nepal’s own economic condition but because of the weakening of the Indian currency. According to Guru Prasad Paudel, spokesperson and executive director of Nepal Rastra Bank, the weakening of the Indian rupee directly impacts the Nepali currency.
Nepal’s exchange rate with India has remained fixed since 1993. “Because Nepal’s currency is pegged to the Indian rupee, our currency depreciates accordingly,” Paudel said. “Due to India–US economic relations, trade, and investment factors, the Indian rupee itself is weakening.”
Impact of Indian Rupee Weakness and Global Economic Factors
In May, the exchange rate was INR 84.55 per US dollar, which has now risen to INR 90.05. This rise has directly affected Nepal’s currency as well. In January 2011, the exchange rate stood at NPR 72.38 per US dollar, and over one and a half decades it has increased by 102.8 percent. Earlier this year, the rate fell from NPR 138.57 in January to 135.19 in April, but by December the Nepali currency had already depreciated by 5.16 percent compared to January.
According to the Times of India, the weakness of the Indian rupee is mainly due to India’s trade tensions with the US, capital outflow, and the role of the Reserve Bank of India. Data shows that in 2025 alone, USD 17 billion worth of investment has exited India.
Similarly, due to trade disputes, the US has imposed tariffs of up to 50 percent on certain imports from India, further lowering business confidence. Paudel noted that while the Indian central bank has room to intervene to stabilize its currency, it has not done so aggressively.
Effects on Nepal’s Economy: Losses and Gains
When the currency depreciates, import-dependent Nepal faces weaker purchasing power. Petroleum products, steel, edible oils, vehicles, and spare parts are the major import items. In the first four months of the current fiscal year 2082/83, Nepal imported goods worth NPR 694.51 billion. As the dollar becomes more expensive, Nepal must spend more on imports.
Foreign travel expenses, education abroad, and interest payments on public debt also become costlier. However, spokesperson Paudel clarified that not all effects are negative. Nepal gains from inflows of dollars through remittances, tourism, and exports. Remittances directly benefit households, giving them more value when sending foreign currency to Nepal.
According to Nepal Rastra Bank’s data, remittance inflows in the month of Asoj reached NPR 201 billion, an increase of 35.4 percent in Nepali currency and 29.2 percent in US dollars. Similarly, Nepal’s earnings from service exports, including information technology services, will also see positive impacts.
