Economy

Rupee weakens, gold price plunges

Published by Octron on March 27, 2010

Nepali currency weakened against US dollar this week, rendering imports expensive but raising income of exporters and remittance receivers. Despite the devaluation of rupee, gold price went down in the domestic market, as yellow metal continued to lose its shine in the international markets.

Currency

Nepali currency shed 19 paisa against a US dollar this week, as demand for the greenback increased in India, with whose currency Nepali rupee is pegged. A US dollar was exchanged at Rs 73.19 on Friday.

Rupee was exchanged at Rs 73 per US dollar when the market opened Sunday this week. With demand for the greenback remaining unchanged, the exchange rate had remained stable on Monday. However, rupee started depreciating over the following days, dropping 14 paisa on Tuesday and further 6 paisa on Thursday. On Friday, however, rupee gained 1 paisa against a dollar.

In contrary, rupee gained Rs 1.92 against a euro and Rs 1.57 against a pound sterling during the period. On Friday, a euro was exchanged at Rs 97.49, while a pound sterling was exchanged at Rs 109.16.

Bullion

Gold price dropped Rs 8.5 per gram in the domestic market, as the price of yellow metal went down in the international market this week. Gold was traded at Rs 27,435 per 10 grams on Friday.

Nepal Gold and Silver Dealers Association, which fixes the prices of gold in the market, had opened trading at Rs 27,520 per ten grams on Sunday. With global prices jumping, gold became expensive by Rs 85 per 10 grams over the next three days. However, it dropped Rs 170 per 10 grams overnight on Thursday, as demand for gold slumped. Likewise, the price of silver too recorded a drop to Rs 416 per 10 grams over this week.

As Nepal fulfills domestic bullion demand through imports, any changes in the global prices of precious metals directly impact the domestic market.

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