What is 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 to reference the NPR is Rs, although Rp is also sometimes used.
Key points to remember
- The NPR is the national currency of Nepal.
- Its exchange rate is indexed to the Indian rupee (INR).
- Nepal has experienced increased economic growth in recent years, as well as lower inflation rates.
Understanding the NPR
The NPR was introduced in 1932, replacing the previous currency, the Nepalese mohar. Its exchange rate is based on a fixed parity with respect to the INR. Before 1994, the NPR was indexed at a rate of 1 INR by 1.45 NPR. However, since 1994, the connection has been adjusted to 1 INR for 1.60 NPR.
The NPR is divided into units known as “paisa” and is distributed in the form of coins and banknotes. A rupee is made up of 100 paisa. Today, the NPR coins are denominated in units of 1, 2, 5, 10, 25 and 50 paisa. Banknotes are denominated in units of 5, 10, 20, 50, 100, 500 and 1,000 paisa. The latest series of banknotes, released in 2020, features images of Mount Everest and other local symbols of natural and cultural significance.
Transactions in the NPR can be difficult for foreigners, as there are three main exchange rates in Nepal: an official central bank rate, a legal private bank rate and an illegal black market rate. Among these, the most favorable exchange rates are generally found on the black market. For this reason, much of the local trade takes place at the black market exchange rates.
However, most tourists will use private banks and therefore get a cheaper rate. The same goes for official exchange companies and exchange services offered at Kathmandu airport. These authorized agents will transact at private bank rates.
Due to the legal ambiguities involved, travelers are advised to obtain and retain receipts for all of their foreign exchange transactions, so that they can prove that only legal agents have been used. Likewise, travelers should ensure that they have adequate tickets and coins of low value, as small vendors may be reluctant to make changes.
Example of the NPR in the real world
Nepal’s economy has grown at an average of around 4% between 1961 and 2019. More recently, growth in gross domestic product (GDP) has exceeded the 5% threshold, the past three years showing growth above 8 %, 6.5%, and 7%, respectively. Between 2008 and 2020, inflation hovered around 9%, but fell to around 3.5% and 4% in 2020 and 2020.
Relative to the USD, the NPR has depreciated over the past 10 years. In September 2009, 1 USD was equivalent to just over 75 NPR. However, by September 2019, the value of $ 1 had increased to more than 110 NPR.