The Nepali rupee hit fresh lows against the US dollar with Nepal Rastra Bank (NRB) fixing the exchange rate at 113.25 per dollar for Thursday.

The rupee’s free fall is an effect of the steady depreciation of the Indian rupee with which it is pegged.

India’s rupee hit fresh lows against the dollar on Wednesday as emerging market currencies continue to be sold off, media reports said.

The under-pressure currency in Asia’s third-largest economy slid to 70.50 to the greenback in late morning trade, a record low, it said. The rupee has been steadily falling throughout 2018 after starting the year at 63.67.

The depreciation of the domestic currency could exert pressure on the balance of payments. In addition, it could raise market prices significantly as the country is highly dependent on imported goods for consumption, according to traders.

Even though the fall in the value of the Nepali rupee vis-à-vis the greenback makes domestic products cheaper for foreign buyers, Nepal can hardly benefit from it as its export basket is too small compared to imports.

According to NRB, the country export earnings amounted to Rs81.19 billion while imports bill amounted to a staggering Rs1.24 trillion in the last fiscal year that ended on mid-July.

However, on the bright side, the appreciation of the dollar can attract more tourists to Nepal as it raises their purchasing power. Also, it can benefit remittance earners as the US dollars migrant workers send home will buy more Nepali rupees. (PR)