FEB 08 - The business hub of Birgunj and surrounding markets have been facing a shortage of Indian currency due to which it is trading higher than the official exchange rate.

Though the official exchange rate is Rs. 1.60, Indian currency is being exchanged at the rate of Rs. 1.62 in the open market. Traders in the town said that the Indian currency shortage had been fuelled by Nepal Rastra Bank's (NRB) strict measures to limit currency exchange last month.

Om Prakash Sikaria, president of the Birgunj Chamber of Commerce and Industry, said that Indian currency was being exchanged at a higher rate than set by the government.

He said that earlier traders in neighbouring Raxaul used to accept Nepali currency, but now they have stopped doing so and were setting the exchange rate arbitrarily.

Nepal has been facing a shortage of Indian currency because of a trade deficit with India. NRB used to fulfil the requirement of Indian currency by selling U.S. dollars whenever there was a shortage.

Sikaria said that the shortage of Indian currency at a time when the nation's economy was facing a crisis would worsen the situation.

According to Rajesh Kayal, a trader, the city had been facing the shortage of Indian Currency since last four months but the situation worsen further after the government put ban on import of gold and export from Nepali crusher industries to India.

Posted on: 2010-02-08 09:51

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