Illegal money changing booms on Indo-Nepal border

There is an unprecedented rush for the Indian rupee in Nepal - possibly fuelled by talk of a devaluation of the Nepali currency - giving rise to unauthorised money-changers on this side of the border.

The exchange rate has remained unchanged for the last 17 years at Nepali Rs.160 for Indian Rs.100. But Nepalis are shelling out Nepali Rs.164 for every Rs.100 - that is an additional Nepali Rs.4 - to the illegal money changers.

Indian currency has become such a hot commodity in the neighbouring country that even the 1,000 rupee and 500 rupee notes, which are officially banned in Nepal, are in huge demand.

ATMs installed by Indian banks in Nanpara town, about 30 km from Rupaidiha, are also being emptied out much faster. Even though Rupaidiha generates business worth crores in a day, there is not a single ATM in the town.

Perhaps the absence of an “authorised” money changing counter in any bank on the Indian side is also responsible for the growth of the money changing business.

Nepalganj on the other side of the border does have a few official money-changers, but there too a premium is openly demanded.
In any case, only limited currency can be exchanged at the “authorised” counters with the result that the illegal ones are thriving.