May 10: The US dollar has become most expensive compared to the Nepali currency on Tuesday. According to the foreign exchange rate announced by Nepal Rastra Bank for Tuesday, the buying rate of one dollar has been fixed at Rs 123.65.
The selling rate of the dollar was Rs 124.25 on Tuesday. It means that Nepali nationals will have to spend Rs 124 and 25 paisa to buy one dollar. This is the first time that the US dollar has become so expensive in the Nepali market. The dollar had reached a new high on the previous day as well.
The dollar index had risen to 104.19 points in international currency market on Monday. This is the highest since July 2002. As the dollar strengthened, the Indian rupee depreciated to a record low against the dollar, making a direct impact on the Nepalese rupee. The Nepalese rupee is pegged to the Indian rupee.
That is, there is a fixed exchange rate between the two currencies. The dollar exchange rate has a direct effect on the Nepalese rupee. On Monday, the dollar’s value had closed at IRs 77.31.
The dollar has been gaining ground in recent days after the United States last week raised interest rates to a two-decade high. With the dollar strengthening and US bond yields rising, foreign investors are pulling out of the Indian market. This has put pressure on the rupee.
The recent rise in investment in the dollar as a safe-haven asset has also pushed up its price. The dollar rose against most of the major currencies, including the euro, the yen and the pound, on Monday.