Kathmandu, June 3 (Xinhua-ANI): The freefall of the Nepali rupee against U.S. dollar has put businessmen, especially those involved in import business from the third countries, in a difficult situation: If they pass the higher import costs on to consumers, their sales might fall, and if not, they might occur losses.
The fall of the Nepali rupee against the dollar is mainly due to the sharp devaluation of the Indian currency, with which the domestic currency is pegged. With the dollar rising sharply against the Indian currency, the Nepali rupee is on a freefall in recent days, losing its value by 12.23 percent since March.
According to Sunday's The Kathmandu Post, importers say strong dollar increases custom duty as well as the value added tax, leading to a sharp rise in the prices of imported goods. At the existing exchange rate of 89.7 Nepali rupees per dollar (for Sunday), they predict a price rise of 20-30 percent, compared to the period when the rate was at 80 rupees a dollar.
"Prices of electronic appliances, on which 20 percent custom duty is levied, will rise by 20-25 percent," Akhil Chapagain, president of Nepal-Turkey Chamber of Commerce and Industry, was quoted by the newspaper as saying.
In case of apparel, most of which are imported from countries other than India, prices will rise by as high as 25 percent. Prices of apparel imported from China and Thailand have already gone up in domestic market. Fast moving consumer goods imported from third countries are projected to get dearer by around 30 percent. (Xinhua-ANI)