Rupee weakens, gold rises, NEPSE plummets

KATHMANDU, Jan 3: Nepal’s currency continued to weaken vis-a-vis the US dollar over the week, as the Indian rupee, to which our currency is pegged, continued to lose value because of the global financial crisis. Weakening investor confidence also caused stocks to slide during the week, whereas the price of gold edged up in the domestic market, according to data from Nepal Gold-Silver Dealers Association. [break]

Currency

The partially convertible Nepali rupee weakened by Rs 1.05 against the US dollar over the week and settled at Rs 78.35 per dollar, thanks to increase in demand for the dollar in the Indian market.

Nepal Rastra Bank, the central bank of the country, had fixed the selling rate of the dollar at Rs 77.30 on Sunday, but the rupee depreciated against the dollar and the rate closed at Rs 78.40 on Friday.

The rupee also weakened by Rs 2.54 against the Euro and the rate closed at Rs 110.46 per Euro (€).The domestic currency strengthened against Pound Sterling (£) by Rs 1.06 over the period to settle at Rs 113.21 per Pound. As per the existing open market exchange rate policy, rates quoted by different banks could differ.

Bullion

The price of gold in the local market went up Rs 21.5 per gram over the week and settled at 21,650 per 10 grams, as international prices recorded a major upheaval amid rise and ease in demand for the yellow metal.

According to weekly prices released by Nepal Gold-Silver Dealers Association, the local market opened this week at Rs 21,435 per 10 grams. But it gained a whopping Rs 340 overnight and was traded at Rs 21,775 on Monday. While the price remained unchanged on Tuesday, it dropped by Rs 255 and traded at Rs 21,520 on Wednesday.

On Friday, gold closed at Rs 21,650 per 10 grams. Likewise, the price of silver rose by Rs 4 per 10 grams to close at Rs 300 this week.

Since Nepal is dependent on the international market for meeting domestic demand for bullion, any fluctuation in the global market is reflected in domestic prices.

Stock market

As the recent policy changes continued to ruffle investors, the Nepal Stock Exchange (NEPSE) index lost 5.39 points over the week and closed at 693.81 points on Thursday.

During the week, 544,946 share units of 78 companies changed hands, whereas the figure last week was 568,175. Despite the downturn in transactions, the volume of trading this week went up to Rs 372.19 million, compared to Rs 365.68 million last week.

Transactions in shares of category ‘A’ companies this week were recorded at Rs 148.3 million, which was 39.86 percent of total transactions.

As per NEPSE´s statement, the index for commercial banks tumbled by 0.93 points. Likewise, indices for development banks, insurance, finance, manufacturing and others group also slid during the week.

With a rise in index by 23.13 points, the hydropower group remained the sole gainer at the stock market this week. Indices of trading and hotels groups did not change over the week.