Rupee hits 105.31 against dollar

KATHMANDU, Aug 27: Nepali rupee hit an all time low of 105.31 against US dollar according to the exchange rate fixed by the Nepal Rastra Bank for Wednesday. This happened after the Indian rupee, to which Nepali rupee is pegged, fell to a new low losing against the greenback. In earlier low, Nepali rupee was valued at 103.7 per dollar on August 20.



Reuters news agency said the partially convertible rupee slumped to a record low of 66.30 to the dollar, despite Indian central bank´s intervention to ease the pace of the decline, surpassing its previous all-time low of 65.56 hit last Thursday.



The currency fell 2.9 percent on the day to close at the new low with its biggest single-day percentage fall since October 1995. In the past three months the rupee has depreciated by over 13 percent. [break]



The continued drop of rupee against dollar has stirred a fresh debate among economists about the significance of the peg of Nepali rupee to the Indian currency. Though stronger US dollar in relation to Nepali rupees has driven up the overseas income from remittance and exports, it has pushed up cost of production of domestic goods ultimately jacking up inflation in the market.



However, speaking at a power summit in the capital the governor of Nepal Rastra Bank Yuba Raj Khatiwada ruled out immediate revisit of the peg system.

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Nepali rupee hits new low against US dollar