Nepalis living abroad send large amounts of remittances as they benefit from the appreciation of the dollar.
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Nepal also benefits when the dollar becomes stronger. In the current situation, the biggest benefit falls on remittance inflows. When the dollar is strong, on the one hand, remittance inflows (money entering the country) increase, and on the other hand, the number of people sending remittances also increases.
Nepalis living abroad send large amounts of remittances as they benefit from the strengthening of the dollar. One of the reasons for the continuous increase in remittances in recent months is the strengthening of the dollar. A strengthening dollar also has a positive impact on foreign direct investment (FDI).
Thus, the improvement in remittances and FDI helps greatly in keeping the country's balance of payments in surplus. Nepal could have benefited from the strengthening of the dollar by making good improvements in tourism and exports. Although tourists are now gradually increasing, it has not been able to increase as expected. Exports remain high.
However, Nepal has not been able to benefit from the increase in exports due to the increase in domestic production, not due to the increase in exports, but due to the increase in the import of crude oil from India and its processing here and export to India.
When the value of the dollar increases, the biggest loss is in the payment for imports of goods and services. As imports are increasing at a rapid pace, the liability to pay for them is also increasing.
When the nerva weakens, the liability to pay for foreign debt investment increases. You also have to pay a lot of money to repay the principal and interest on loans taken from abroad. The cost of going abroad for medical treatment, studies, and travel is expensive.
