Overview of the Nepalese Rupee (NPR)
The Nepalese Rupee (NPR) is the official currency of Nepal, issued and regulated by the Nepal Rastra Bank, the central financial institution of the country. Commonly represented by the symbols Rs or Rp, the NPR plays a crucial role in Nepal’s economy.
Key Insights
- Introduction History: The Nepalese Rupee was introduced in 1932, supplanting the Nepalese mohar.
- Exchange Rate: The NPR is pegged to the Indian Rupee (INR) with a rate of 1.6 NPR to 1 INR.
- Economic Indicators: Nepal has shown significant economic growth recently, with lower inflation rates and an expanding GDP.
- Currency Forms: NPR is available in various denominations, including coins in paisa and rupees and banknotes.
- Exchange Challenges: Foreigners may face difficulties due to the presence of multiple exchange rates: official, legal private, and illegal black-market rates.
In-Depth Look at the Nepalese Rupee (NPR)
First issued in 1932, the Nepalese Rupee replaced the old Nepalese mohar. It introduced convertibility in 1993, linking the NPR to INR with a fixed rate of NPR 160 per INR 100.
With NPR divided into “paisa”, coins are available in denominations of 1, 5, 10, 25, and 50 paisa, as well as 1, 2, 5, and 10 rupees. Banknotes come in 1, 2, 5, 10, 20, 50, 100, 500, and 1,000 rupees denominations.
The Dynamics of Exchanging NPR
For foreigners, exchanging NPR can be complex due to three main exchange rates: official, legal private, and black market. Generally, better rates are available in the black market where much of the local commerce occurs. Official outlets like private banks and airport forex services often offer less favorable rates. Travelers are urged to keep exchange receipts to ensure legality.
Nepal’s Economic Landscape
From 1965 to 2019, Nepal’s economy grew at an average rate of around 4%. Recent data shows GDP growth exceeding 5%, with notable figures like 6.66%, -2.37%, and 4.25% over the past three years. Inflation, which hovered around 9% between 2008 and 2016, dropped to nearly 3.6% in 2017 and slightly above 4% by 2021. Over the last decade, the NPR has depreciated against the USD: from over 77 NPR for 1 USD in September 2009 to about 130 NPR by October 2022.
Current Exchange Rates
As of October 2, 2022, 1 USD equals around 130.6 NPR. Meanwhile, 1 euro is approximately 127 NPR.
Practical Comparisons
Comparison to Indian Rupee
The Nepalese Rupee is distinct from the Indian Rupee despite both using
Related Terms: Indian rupee, currency exchange, inflation, GDP, black market
References
- OANDA. “Nepalese Rupee”.
- Nepal Rastra Bank. “Impact of Exchange Rate on”Trade Deficit and Foreign Exchange Reserve in Nepal: An Empirical Analysis, Page 37.
- Macro Trends. “Nepal GDP Growth Rate 1961-2022”.
- The World Bank. “Inflation, Consumer Prices (Annual %) - Nepal”.
- Nepal Rastra Bank. “Foreign Exchange Rates”.
- Truly Financial. “Exploring the Top 10 Weakest Currencies in the World as of Jan. 31, 2022”.
