No need to panic from increasing value of US dollar as Nepali experts pin their hopes on Indian govt 'intervention'
The US dollar is becoming dearer due to the continuous slide in the value of Indian currency to the dollar, economic experts said.
Talking to state-owned news agency RSS, Nepal Rastra Bank former governor Deependra Bahadur Kshetry said the India Government could intervene the market and sell gold reserve and foreign bond to prevent that country’s economy from sliding further. India did the same in the past also and there is no need to panic from the increasing value of the US dollar, he added.
The US dollar became dearer after foreign investment of around INR 12 billion was returned following transition in the Reserve Bank of India (RBI). Tenure of the present RBI governor has ended and the new governor has yet to assume office, he said.
The recent bullish trend in the US dollar exchange rate would not last longer than a week, he said.
Rejecting proposal of some economists of changing the pegged exchange rate system of the Nepali currency to ‘currency basket’, Kshetry, who also served as the Vice Chairman of National Planning Commission, said such policy would further affect the country’s economy.
The NRB can keep the existing foreign currency reserve intact and keep the price hike under control as an immediate measure, he said, suggesting the central bank to reconsider the exchange facility being given to those going abroad and the present situation of gold import.
Senior Economic advisor at the Finance Ministry, Chiranjibi Nepal, stressed the need of taking immediate measures to strengthen the country’s economy and interfering in the market to control price rise.
The economy would become weaker if pegged exchange system with India is removed, he said. Strengthening country’s economy and thereby increasing export and reducing dependency was the best alternative, he told RSS.
Import of petroleum products will be affected the most by the increasing exchange rate of the US dollar. Presently, Nepal Oil Corporation is incurring a loss of around one billion rupees every month and this amount will go up with the increasing exchange rate of the dollar.
The NOC will have no alternative except adjusting the price and finally costumers will be hit by this. Similarly, import of industrial raw materials will be expensive and production cost will unexpectedly go up and international flights will become costly. Currently, the exchange rate of one US dollar is Rs. 100.60. Nepalnews.com