Gold price up as rupee falls

Nepali currency continued to spiral down against US dollar over this week, as greenback gained against Indian currency, with which Nepali rupee is pegged, amid its growing demand there. The global bullion market, on the other hand, remained fairly stable, but gold became expensive in the domestic market largely due to the devaluation of local currency.

Currency

Nepali rupee depreciated against US dollar by 53 paisa over this week as increase in demand for greenback in India pushed its value upward. A dollar was exchanged at Rs 78.13 on Friday.

Nepal Rastra Bank (NRB), the monetary authority of the country, had fixed exchange rate of Nepali currency at Rs 77.60 per dollar on Sunday. Nepali currency appreciated briefly against greenback on Monday by 10 paisa, but it lost 90 paisa overnight and dropped to Rs 78.40 per dollar on Tuesday. Rupee rallied over the next three days though and settled at Rs 78.13 a dollar on Friday.

Unlike the past week, rupee fell against euro and pound sterling as well over this week. According to NRB, a euro was exchanged at Rs 111.06 on Friday, while a pound sterling was exchanged at Rs 129.21. Going by the open market exchange regime, the rate varied marginally among the commercial banks.

Bullion

Gold price became expensive by Rs 40 per 10 grams on Friday, compared with the price on Sunday, even though its global price remained fairly stable during the week. Dealers, who traded the yellow metal at Rs 24,090 per 10 grams on Friday, attributed the rise mainly to the devaluation of currency.

According to Nepal Gold and Silver Dealers´ Association (NGSDA), gold was traded at Rs 24,050 per 10 grams on Sunday. It became expensive by Rs 20 per 10 grams overnight on Tuesday, but prices receded to Rs 24,005 over the next two days only to bounce back following the reverse course of currency movement on Thursday and Friday.

The price of silver went down to Rs 370 per 10 grams on Friday, compared with the price on Sunday. As Nepal meets its domestic bullion demand through imports, any fluctuation in international prices directly impacts the domestic prices.
Source: Republica