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These days, the Indian Rupee is facing heavy pressure against the US Dollar amidst the turbulent equations of the global market. Due to the skyrocketing prices of crude oil at the international level, the ongoing serious geopolitical tension in West Asia (Middle East) and the all-round strength of the dollar in the global markets, the domestic currency is witnessing a record decline. On Wednesday (May 20), the Indian rupee fell against the dollar to its all-time low. 96.59 Reached close to.
However, despite this strong challenge on the dollar front, the coinage and dominance of the Indian Rupee (INR) against the currency of neighboring country Nepal still remains as strong as before.
What is the difference between Indian and Nepali rupee?
According to the latest foreign currency exchange rates, the Indian Rupee is in a much better position against the Nepalese Currency (NPR):
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1 Indian Rupee close to 1.60 Nepalese rupees Is equal to.
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There itself, 1 Nepali Rupee According to Indian currency approximately 62 paise Is of.
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If we understand it in more simple and practical language, then if you go to Nepal with 100 Indian rupees, then its purchasing power there is considered to be equal to about 160 Nepali rupees.
It is a matter of relief that the Indian Rupee is certainly stronger than the Nepali currency, but the situation is not as bad as in our other neighboring country Pakistan, where the currency difference has increased manifold. The main reason for this is a unique and fraudulent economic agreement between the two countries.
After all, why does Nepal’s currency follow India’s pattern?
Nepal’s currency does not float completely independently, but is instead diplomatically pegged to the Indian rupee under a fixed exchange rate. For decades the value of 1 Indian Rupee has been locked absolutely fixed at 1.60 Nepalese Rupee. This is the reason that whenever the health of the Indian Rupee improves or deteriorates due to international reasons, the Nepalese Rupee also strengthens or weakens in the same proportion.
Mathematics of Dependency: Nepal is a landlocked country from all sides and is completely dependent on India for its economy, tourism, fuel and import of almost every small and big daily item. Nepal buys the largest part of its requirement from Indian markets. In such a situation, to avoid any kind of instability and losses in business, the Government of Nepal and its Central Bank have adopted a very wise policy of keeping their currency linked to the Indian Rupee.
From Nashik Press to China: Interesting history of currency printing
The relations between India and Nepal are not only commercial but also historical. The very interesting thing is that the initial currency of Nepal was printed in India itself. When the central bank of Nepal i.e. ‘Nepal Rastra Bank’ did not come into existence and in its initial operational days, Nepali notes were printed at ‘India Security Press’ located in Nashik, India.
Till 2015, Nepal was largely dependent on Indian printing presses for printing its currency. However, in subsequent years, due to technical and commercial tenders, Nepal started getting its notes printed by Chinese government companies, but despite this, the basis of its value is still the Indian Rupee.
Indian rupee moves freely in Nepal markets
Due to the open border and deep family and economic ties between the two countries, the use of Indian currency notes is very common in the common markets of Nepal, especially in the border areas. The Indian rupee is considered highly reliable and easily accepted at major tourist destinations, hotels, transport and local shops in Nepal. Every day thousands of people move freely between the two countries for education, treatment, employment and religious pilgrimage, due to which the Indian rupee has become an integral part of everyday life there.
What is the real concern for India?
Even though the Indian rupee is strong in Nepal, the real concern for India’s policy makers and the Reserve Bank of India (RBI) is its continuously declining credibility against the dollar. India imports more than 85% of its total crude oil requirement from other countries, for which payment has to be made in dollars. Whenever oil becomes expensive in the international market, India’s forex reserves decrease rapidly and the demand for dollars increases, putting pressure on the rupee. At present, the eyes of market experts are fixed on what steps the Central Bank takes to manage the rupee in the coming days.