| rajendra |
Posted
on 01-Dec-00 07:28 PM
From Kathmandu Post
Rupee plunges, FEDAN asks NRB to intervene
Post Report
KATHMANDU, Nov 30 - Nepalis rupee dipped further by 25 paisa and traded at Rs 74.65 against one US dollar on November 29.
The decline in Nepali rupee is attributed to the devaluation of Indian currency to the dollar by 16 Indian paisa and the shortage of dollars in the markets. Indian currency traded at Rs 46.88 November 28, against its previous rate of IRS 46.72 for a dollar.
Talking to The Kathmandu Post Bikram Man Singh, Executive member of Foreign Exchange and Money Dealers’ Association of Nepal (FEDAN) said, "The decline of Nepalese rupee against dollar is due to increased demand for dollar in the markets." One reason is that, Nepalese currency maintains a fixed rate of exchange with Indian currency, and any fluctuation in Indian rupees leads to a reciprocal change in Nepalese currency, Singh said.
It is learnt that Everest Bank Limited, Nepal Industrial and Commercial Bank Limited and Nepal-Bank of Ceylon had tried to buy dollars in the market, but to no avail.
FEDAN has already requested Nepal Rastra Bank (NRB) to intervene and off-load dollars amounting to US $ 3 to 6 million in the market, Singh said. However, Central Bank has yet to concede to the FEDAN request to calm down the mounting demand for greenbacks in the market.
The down-slide of Indian currency and the dearth of dollars in the market has resulted in the continued depreciation of Nepali rupee in the last few months.
FEDAN, an association of 14 commercial banks, adopts a common market strategy to request the central bank for release of hard-currencty, if the commercial banks fail to secure dollar in the inter-bank market.
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