Definition of Nepalese Rupee (NPR)


What is the Nepalese Rupee (NPR)?

The Nepalese Rupee (NPR) is the national currency of Nepal. It is administered by the central bank of Nepal, the Nepal Rastra Bank. The most common symbol used when referring to NPR is Rs, although Rp is sometimes used as well.

Key takeaways

  • The Nepalese Rupee (NPR) is the national currency of Nepal.
  • The NPR exchange rate is pegged to the Indian Rupee (INR).
  • Nepal has seen higher economic growth in recent years, along with a decline in inflation rates.

Understanding the Nepalese Rupee (NPR)

The NPR was introduced in 1932, replacing the previous currency, the Nepalese mohar. Its exchange rate is based on a fixed exchange rate against the Indian rupee (INR). Before 1994, the NPR was pegged at a rate of INR 1 to NPR 1.45. However, since 1994 the parity has been adjusted to 1 INR times 1.60 NPR.

The NPR is divided into units known as “paisa” and circulates in both currency and banknote form. A rupee is made up of 100 paisa. Today, NPR coins are denominated in units of 1, 2, 5, 10, 25 and 50 paisa. The banknotes are denominated in units of 5, 10, 20, 50, 100, 500 and 1,000 paisa. The most recent series of banknotes, launched in 2015, features images of Mount Everest along with other local symbols of natural and cultural significance.

Transactions on the NPR can be difficult for foreigners, because there are three main exchange rates operating in Nepal: an official central bank exchange rate, a legal exchange rate from a private bank, and an illegal market exchange rate. black. Of these, the most favorable exchange rates are generally found on the black market. For this reason, much of the local trade is done at black market exchange rates.

Most tourists, however, will use private banks and therefore get a less favorable rate. The same goes for formal exchange rate companies and foreign exchange services offered at Kathmandu airport. These authorized agents will carry out transactions at private banking rates.

Due to the legal ambiguities involved, travelers are advised to obtain and keep receipts for all their currency exchange transactions, in order to prove that only legal agents were used.

Travelers should ensure that suitable small-denomination notes and coins are available, as small vendors may be reluctant to provide change.

Nepal Economy

Nepal’s economy has grown at an average rate of about 4% between 1961 and 2019. More recently, gross domestic product (GDP) growth has risen above the 5% threshold, and the last three years have shown growth of more than 8%, 6.5%, and 7%, respectively. Between 2008 and 2016, inflation remained at around 9%, but fell to about 3.6% in 2017. Since then, it has risen again and was slightly above 5% in 2020.

Relative to the USD, the NPR has depreciated over the past 10 years. In September 2009, $ 1 was equal to just over NPR 75. However, by July 2021, the value of $ 1 had risen to more than 119 NPR.

www.investopedia.com

READ ALSO:  Definition of the savings bond plan
About the author

Mark Holland

Leave a comment: