DEFINITION of 'NPR (Nepalese Rupee)'

NPR is an abbreviation or symbol for the Nepalese rupee, the legal currency of Nepal. There are three primary currency exchange rates in Nepal; the official rate is the central bank rate. The private bank rate is a little more generous but is also legal in Nepal. The final rate is only offered on the black market and is established by individual stores and by travel agents; this rate is extremely generous but is not legal.

BREAKING DOWN 'NPR (Nepalese Rupee)'

The NPR was introduced in 1932 and replaced the silver mohar, with the exchange rate being two mohar to one rupee. One rupee is comprised of 100 paisa. The NPR was pegged to the value of the Indian rupee in 1993. NPR is actually the currency code for the Nepalese rupee. The most common symbol used when referencing this currency is Rs, though Rp is also used. Paisa, the denominations of money that comprise the NPR, is a monetary unit used in several countries and can be likened to a penny in U.S. currency.

History and Currency

After its introduction, the NPR was pegged to the Indian rupee in 1933, with 1.6 Nepalese rupees being equivalent to one Indian rupee. Throughout the 1940s and 1950s NPR coins were created using brass, nickel and bronze. The first NPR banknotes were printed and distributed beginning in 1951. Denominations included one, five, 10 and 100 rupees. Aluminum coins were eventually introduced in 1966 that replaced the smaller denominations of one, two and five paisa. Brass coins replaced the 10 paisa coins. In 1971, 500 and 1,000-rupee denomination banknotes were added to circulation.

The Trouble with Currency Exchange

The three exchange rates for the NPR have made currency exchange troublesome. Only two of the three rates are legal, though, the exchange is not consistent between them. And though the private bank rate and the black market rate are more generous that the official exchange rate, the exchange does not favor the individual exchanging a foreign currency for NPR currency. For example, if an individual were to go to a private bank to exchange U.S. dollars for NPRs, the bank would take a good deal more out of each dollar than the individual would receive back in NPRs. The story is similar for the black market exchange rate, though, typically far worse for the individual exchanging U.S. currency. In many cases, the individual will end up with pennies back on each dollar. Also, after leaving Nepal, the rate of exchange back to the originating, or any other, currency is very small. Only up to 10% of all receipts for exchanges made from a foreign currency to NPRs will be returned to an international currency.

RELATED TERMS
  1. INR (Indian Rupee)

    The currency abbreviation or currency symbol for the Indian rupee ...
  2. MUR (Mauritius Rupee)

    The currency abbreviation for the Mauritius rupee (MUR), the ...
  3. SCR

    SCR is the abbreviation for the Seychellois rupee, the currency ...
  4. MUR

    In currencies, this is the abbreviation for the Mauritius Rupee. ...
  5. PKR

    In currencies, this is the abbreviation for the Pakistani Rupee.
  6. Demonetization

    India's demonetization means that it is stripping a currency ...
Related Articles
  1. Investing

    The Pros and Cons of a Fully Convertible Rupee

    Amid the rising economic power of India, the talks of making the Indian currency fully convertible are gaining momentum. We look at the pros and cons.
  2. Investing

    5 Emerging Markets Currencies to Consider in 2016

    Take a look at five emerging market currencies that could show strength in 2016, despite expectations that most emerging economies will continue to struggle.
  3. Insights

    India Takes 500 and 1000 Rupee Notes Out of Circulation to Fight `Black Money'

    Prime Minister Modi says the plan is aimed at ending the underground economy and fighting counterfeiting in a nation where 1% of the population pays taxes
  4. Trading

    Currency Trading On The Black Market

    The black market for currencies is increasingly becoming prevalent in nations marked by certain adverse economic factors such as high inflation rates and unrealistically high exchange rates.
  5. Retirement

    The Cheapest Places to Retire in India

    Outside the major metroplexes of Mumbai and Delhi are many quieter locations ideal for retirees – and they offer less expensive living costs as well.
  6. Personal Finance

    The Worst Place to Exchange Currency

    Exchanging currency is a necessary part of traveling, but not all currency exchanges are created equal.
  7. Trading

    Currency exchange: Floating rate versus fixed rate

    Baffled by exchange rates? Wonder why some currencies fluctuate while others are pegged? This article has the answers.
  8. Trading

    Interest Rate and Currency Value And Exchange Rate

    In general, higher interest rates in one country tend to increase the value of its currency.
  9. Trading

    Top 5 Hardest-Hit Currencies

    The value of a country's currency is dependent on many factors that will cause it to fluctuate, relative to other world currencies.
RELATED FAQS
  1. How are international exchange rates set?

    Knowing the value of your home currency in relation to different foreign currencies helps investors to analyze investments ... Read Answer >>
  2. How do national interest rates affect a currency's value and exchange rate?

    Generally, higher interest rates increase the value of a given country's currency, but Interest rates alone do not determine ... Read Answer >>
  3. How does the balance of payments impact currency exchange rates?

    Take a brief look at the relationship between a nation's balance of payments and the exchange rate value of its currency ... Read Answer >>
Hot Definitions
  1. Net Present Value - NPV

    Net Present Value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows ...
  2. Price-Earnings Ratio - P/E Ratio

    The Price-to-Earnings Ratio or P/E ratio is a ratio for valuing a company that measures its current share price relative ...
  3. Internal Rate of Return - IRR

    Internal Rate of Return (IRR) is a metric used in capital budgeting to estimate the profitability of potential investments.
  4. Limit Order

    An order placed with a brokerage to buy or sell a set number of shares at a specified price or better.
  5. Current Ratio

    The current ratio is a liquidity ratio that measures a company's ability to pay short-term and long-term obligations.
  6. Return on Investment (ROI)

    Return on Investment (ROI) is a performance measure used to evaluate the efficiency of an investment or compare the efficiency ...
Trading Center