By all accounts, India is all set to review the currency rate between the two countries very soon. At present one hundred Indian rupees is equivalent to Nepalese rupees 160 and according to this fixed rate, the rates of other foreign currency, including the US dollar are set.
That this fiscal agreement was going to be reviewed that was reported by the People’s Review some months back. In that report a high ranking Nepali industrialist had revealed to this Weekly that none less than the then Indian Finance Minister P Chidabaram had told him about India’s plans of making her currency convertible in the international market. As our currency's exchange rate is fixed with the Indian currency, our currency would face serious setback after the Indian decision, this Weekly had explained. But the concerned sector didn't take the issue seriously at that time.
“I don’t know why our political leaders and economists are not doing anything about this, which can finish off our whole economy,” he had then said.
Now also, reliable sources claim that the Nepali economy would totally cave in, if this policy of India is implemented. “There are reports that India has made an elaborate plan to implement this plan,” one source said and he warned that the new rate of the Indian currency could go as high as Nepali rupees 215 to 250 for one hundred IC after that decision of India.
Another alarming factor is that there seems to be a well worked out plan to first create a shortage of Nepali currency in the market. This could be done both by India buying Nepali currency for a short term and also by panic buying of foreign currency by the Nepalese themselves. “Most of the Nepalese industrialists and prominent people hardly have any Nepali currency, they have already whisked away their hard cash to foreign banks or bought foreign property,” another source said.
According to a Rastra Bank source, it would not be that difficult for a country like India to buy large amounts of Nepalese currency to make a success of a political and economic agenda.
He added that if the present plan of the Indian policy makers is a success, then the price of one US dollar could go higher than NC Rs. 100. This would take a terrible toll on the country’s economy and would further aggravate the already difficult conditions of the average Nepali individual.
“If such a situation comes, no government would be able to exist in Nepal and the successfully functioning banks of the country would turn bankrupt,” a senior economist warned.
This could be a deliberate plan of India to make Nepal a failed state and make it easier for it to impose its policies in this troubled nation.