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 referencing the NPR is Rs, although Rp is also sometimes used.

Understanding Nepalese Rupee (NPR)

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

The NPR is divided into units known as "paisa" and is circulated in both coin and banknote forms. One rupee is made up of 100 paisa. Today, the NPR's 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, released in 2015, feature images of Mount Everest along with other local symbols of natural and cultural significance.

Transacting in the NPR can be difficult for foreigners, because there are three primary exchange rates operating in Nepal: an official central bank rate, a legal private bank rate, and an illegal black market rate. Of these, the most favorable exchange rates are generally found in the black market. For this reason, much local commerce takes place at the black-market exchange rates.

Most tourists, however, will use the private banks and will therefore obtain a less favorable rate. The same is true for formal exchange-rate businesses and the foreign-exchange services offered at the Kathmandu airport. These authorized agents will transact at the private banking rates.

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

Travelers should ensure they have adequate small-denomination bills and coins available, as small vendors may be reluctant to provide change.

Nepal's Economy

Nepal's economy has grown at an average rate of roughly 4% between 1961 and 2019. More recently, gross domestic product (GDP) growth has risen above the 5% threshold, with the past three years showing growth of over 8%, 6.5%, and 7%, respectively. Between 2008 and 2016, inflation hovered around 9%, but dropped to roughly 3.6% in 2017. Since then it has edged back up and was slightly higher than 5% in 2020.

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