What Is the Nepalese Rupee?
The Nepalese rupee (NPR) is the currency of Nepal. It is broken into smaller units called paisa and is found in both coin and banknote form. It is managed by the Nepal Rastra Bank, the central bank of Nepal. One rupee is comprised of 100 paisa.
The most common symbol used when referencing this currency is Rs, though Rp is also used.
As of April 2019, it took about 111 Nepalese rupees to equal a U.S. dollar. Conversely, one Nepalese rupee equaled roughly a penny. The currency cannot be exchanged outside of Nepal and it is traded sparsely.
Understanding the Nepalese Rupee (NPR)
The Nepalese rupee got its start in 1932. It replaced the silver mohar, with the exchange rate first set at two mohar to one rupee. For many decades, it traded with a peg to the Indian rupee, as India and Nepal are neighbors, and India is the larger of the two economies. Initially, 1.6 Nepalese rupees equaled one Indian rupee. The government abandoned the floating exchange rate to a peg based on a basket of currencies in 1983.
Nepal's central bank, the Nepal Rastra Bank (NRB), controls currency issuance. Throughout the 1940s and 1950s the NRB created coins using brass, nickel and bronze. Then the NRB issued and distributed its first banknotes in 1951. Denominations included one, five, 10, and 100 rupees.
The NRB introduced aluminum coins in 1966 to replace the smaller denominations of one, two, and five paisa. Brass coins then replaced the 10 paisa coins. In 1971, the NRB added 500 and 1,000-rupee bank notes. The central bank then issued a new series in 2007 and then again in 2012.
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 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 far more generous than the other two, but is not legal.
This three-exchange system makes currency exchange troublesome and inconsistent.
For example, U.S. tourists typically get a relatively poorer exchange at private banks versus what they could get on the black market. The same is true upon leaving the country, when it’s time to exchange any leftover Nepalese rupee back into dollars.
The Trouble With Using NPR in Nepal
Tourists are encouraged to exchange currencies to Nepalese rupee through banks or other authorized agents, such as exchange counters or at the main airport in Kathmandu. Anyone making a currency exchange is advised to get and keep receipts.
If you're using currency around Nepal, you're advised to change large bills to smaller ones. Small businesses, taxis, and rickshaws will rarely make change.