KATHMANDU, Oct 5: Nepali rupee strengthened to almost a 5-and-a-half months high against US dollar over this week, as Indian currency - with which the rupee is pegged - rose amid Indian government´s commitment to fiscal reforms and decisions to welcome foreign investment in pension and other businesses.
Rupee´s gain along with relative steadying of gold, meanwhile, caused the price of yellow metal to drop by Rs 851 per tola (11.664 grams) in the local market.
Nepali rupee gained Rs 1.46 (1.73 percent), against a US dollar over the week. This made imports cheaper, but lowered receipts for exporters and remittance receivers just ahead of the Dashain festival. On Friday, a dollar was exchanged at Rs 83.09 - the highest since April 24.
Nepal Rastra Bank (NRB), country´s monetary authority, had opened the trading Sunday with exchange rate of dollar set at Rs 84.55. Though the rupee fell by 30 paisa on Monday, it gained 38 paisa overnight on Tuesday as Indian government´s commitment to adhere to fiscal norms and decision to open more sectors for foreign investors rose dollar inflow in the southern neighbor.
Rupee gained 33 paisa on Wednesday, another 20 paisa on Thursday and further strengthened by 85 paisa against a dollar on Friday when the market closed this week.
Likewise, rupee gained Rs 1.81 against a euro and Rs 3.47 against a pound sterling over the week. A euro was exchanged at Rs 107.48 on Friday, while a pound sterling closed at Rs 133.88.
Gold became cheaper by Rs 730 per 10 grams (that is Rs 851 per tola) this week as strengthening of rupee and nominal drop in its international prices lowered cost of its import. The yellow metal was traded at Rs 50,530 per 10 grams on Friday.
Bullion trading had opened this week with gold priced at Rs 51,260 per 10 grams on Sunday. But the prices dipped over the subsequent trading days as rupee rallied and global prices steadied. According to Nepal Gold and Silver Dealers Association (Negosida), the price of yellow metal slid by Rs 160 per 10 grams overnight on Monday and dipped by another Rs 90 per 10 grams on Tuesday.
Gold again shed Rs 255 on Wednesday and fell by Rs 170 per 10 grams on Thursday. The yellow metal became cheaper by further Rs 55 per 10 grams on Friday.
The price of silver, on the other hand, remained unchanged over the week. On Friday, silver was traded at Rs 1,016 per 10 grams.