Rupee continues to weaken against dollar

KATHMANDU, May 18, 2013

Nepali rupee weakened by 40 paisa against US dollar this week as the Indian currency, with which rupee is pegged, weakened. Despite depreciation of local currency, gold became cheaper by Rs 1,840 per 10 grams over the week.

Currency

Currency trading opened this week with exchange rate of US dollar fixed at Rs 87.55 on Sunday. The local currency shed 42 paisa to close at Rs 87.97 on Monday after Indian currency weakened following increased demand for the greenback from importers in India. Rupee continued its losing streak on Tuesday as well as the local currency shed 24 paisa to settle at Rs 88.21. Though rupee bounced back gaining 36 paisa on Wednesday, it lost 9 paisa to close at Rs 87.94 on Thursday. Rupee lost another 1 paisa to close at Rs 87.95 on Friday - the last trading day of the week.

According to news agencies, dealers have attributed Indian rupee´s fall to dollar gains against the Euro and Yen overseas but a higher opening in the domestic stock market capped the fall.

Nepali rupee however gained 88 paisa against Euro, and Rs 1.22 against British Pound this week. On Friday, Euro was exchanged at Rs 113.12 while British Pound was valued Rs 133.88.

Bullion

Gold became cheaper by Rs 1,840 per 10 grams over the week, thanks to drop in prices in the international bullion market. The yellow metal was traded at Rs 42,655 per 10 grams on Friday.

Bullion trading had opened this week with gold priced at Rs 44,495 per 10 grams on Sunday. Gold price dropped by Rs 255 on Monday to Rs 44240 per 10 grams. But the price went up by Rs 85 per 10 grams to Rs 44,325 per 10 grams on Tuesday. Gold dropped Rs 430 per 10 grams a day later to close at Rs 43,895 on Wednesday. They yellow metal became cheaper by a whopping Rs 1,025 per 10 grams on Thursday.

According to Federation of Nepal Gold and Silver Dealers Associations, gold price dropped in the local market mainly due to the improvement in the US economy and the global share market and increase in bank interest rates in countries like Australia, Japan, and European states.
On Friday also, gold price went down by Rs 215 per 10 grams to close the week´s trading at Rs 42,655 per 10 grams.

The price of silver also recorded a drop of Rs 38.5 per 10 grams over the week. On Friday, silver was traded at Rs 733 per 10 grams.

Source: Republica