KATHMANDU, Dec 7: Nepali rupee strengthened against US dollar for the second straight week as Indian currency - against which rupee is pegged - gained strength amid growing optimism in India over enactment of a bill that welcomed foreign investment in multi-brand retail.
However, gold price rose in the domestic market, despite rupee´s gain, as European Central Bank´s (ECB) prediction that euro zone economy could shrink further in 2013 caused its price to go up in the international market.
Nepali rupee gained 20 paisa against a US dollar over the week, causing import cost to go down, but also lowering receipts of exporters and remittance receivers. On Friday, a US dollar was exchanged at Rs 87.30.
Nepal Rastra Bank had set the exchange rate of a dollar at Rs 87.50 when currency trading opened on Sunday. But exchange rate of rupee vis-à-vis USD recorded sharp upheavals over the week as strong resistance by oppositions and support by allies to a bill pushed by the Indian government to open foreign investment in multi-brand retail sharply changed sentiment in the currency market in India.
For instance, rupee recorded an overnight gain of 40 paisa on Monday, but shed 51 paisa on Tuesday. Rupee further fell by 29 paisa on Wednesday. However, it gained 40 paisa on Thursday and further gained 20 paisa on Friday when the market closed this week.
Contrarily, rupee shed 15 paisa against a euro and fell by 10 paisa against a pound sterling over the week. A euro closed at Rs 114.1 on Friday, while a pound sterling was exchanged at Rs 140.59 when the market closed this week.
Gold became expensive by Rs 130 per 10 grams this week as its international price rose amid news of gloomy economic outlook of euro zone for 2013. The yellow metal was traded at Rs 51,140 per 10 grams (that is Rs 59,650 per tola) on Friday.
Bullion trading had opened this week with gold priced at Rs 51,010 per 10 grams on Sunday. Though gold price jumped by Rs 130 per ten grams on Monday and further rose by another Rs 215 per ten grams on Tuesday, its price receded by Rs 215 overnight on Wednesday. Gold became further cheaper by Rs 130 per ten grams on Thursday, however, its price again increased by Rs 130 overnight on Friday when the market closed this week.
The price of silver, on the other hand, went down by Rs 12.5 per ten grams over the week. On Friday, silver was traded at Rs 1,007.50 per 10 grams.