Nepal’s Economy Hits A Deadlock; Indian Currency Reaches A Critical Point

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9:36 pm 2 Oct, 2015

The disturbance between supporters of Nepal’s new Constitution and opponent Madhesis is effecting the Nepalese economy.

The relationship soured when the Constituent Assembly of Nepal adopted the Constitution making the Hindu-majority nation a secular republic and dividing it into seven federal provinces.


Madhesis are against the division of provinces and started protests at the Indian Border stopping hundreds of trucks and tankers carrying everyday supplies.

They are mostly Brahmins, both originally from Nepal and migrants from adjoining Indian states like UP and Bihar.

These protests have also resulted in severe rise of Indian currency, as Rs.100 Indian note is being traded for Nepalese Rs.250 in the open market, although the official Nepal exchange rate is Nepalese Rs.159.96 for Indian Rs.100.


People coming from Nepal told TOI:

“The Indian currency in Nepali banks is running short and has been restricted to exchange Indian Rs.2,000 to Rs.5000 only per person for those who are willing to travel to India.”


Since August, more than 43 people, have been killed in violent protests.

Only a handful of trucks are entering Nepal everyday, many of those only carrying perishable items like potatoes and bananas.

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