Economics

What is the Currency of Nepal?

The official currency of Nepal is the Nepalese rupee.

The Nepalese Mohar was the official currency in Nepal between the 17th century and the early 20th century. The Nepalese Mohar was issued through royal decrees from reigning monarchs of the kingdom of Nepal. The subunits which made up the mohar were known as paisa where 32 pasia were equivalent to one mohar. Another subunit of the mohar was known as the dam with 1 Nepalese mohar being equivalent to 128 dams. The Nepalese Mohar was first introduced during the reign of King Girvan Yuddha between 1799 and 1816 where the currency was issued in coinage whereby copper coins were minted in 1 and 2 dam and 2 paisa denominations. Silver and gold coins were minted in three, one-and-a-half, one, three-quarters, half, quarter, eighth, and sixteenth mohar denominations. The minting of copper coins was halted during the reign of the next king, Rajendra while the issuance of three, one-and-a-half and a three-quarters mohar denomination silver coin was discontinued. In 1866, the next king, Surendra (1847-1881) introduced a copper coinage which featured half, one, and two paisa and one dam denominations. However, the minting of the two-mohar gold coinage was discontinued during this period. The Nepalese Mohar was replaced by the Nepalese Rupee in 1932.

The Nepalese Rupee

The Nepalese Rupee is the official currency in the Republic of Nepal. The currency is identified in international money markets through its code NPR and is also abbreviated as Re (in singular) or Rs (in plural). The Nepalese Rupee is made up of subunits known as pasia where 100 paisa makes up 1 rupee. The currency was introduced into the Nepalese economy in 1932 and it replaced the Nepalese Mohar as the kingdom decimalized its currency at the rate of 2 Nepalese mohar to 1 Nepalese rupee. During its adoption, the Nepalese rupee was pegged on the Indian rupee at the rate of 1 Indian rupee to 1.45 Nepalese rupee, a rate which stood from 1932 to 1994 when it was revised to 1 Indian rupee: 1.6 Nepalese rupee.

The Nepalese Rupee in the Monarch (1932-2007)

The currency was initially issued in coinage with the first banknotes being issued during the reign of King Tribhuvan between 1945 and 1955. However, the issue and regulation of the currency was conducted by the kingdom’s treasury, the Sadar Muluiki Khana because the kingdom’s central bank had not been established. The head of the treasury was the nation’s Hindu high priest who was authorized to sign the banknotes. The central bank, the Nepal Rastra Bank, was later established in 1956 and became the regulatory body of the national currency and its leader, the Governor replaced the Hindu high priest as the person authorized to sign the banknotes. The banknotes bore the likeness of the king on the obverses dressed either in military attire or in traditional Nepalese attire.

The Nepalese Rupee in the Republic (2008-present)

After Nepal ceased from being a monarch and became a Republic in 2007, the currency underwent a change in appearance. All banknotes issued thereafter did not have the likeness of the king but had the image of Mount Everest on the obverse instead. Currently, the frequently used banknotes include 5, 10, 20, 50, 100, 500, and 1000 rupee denominations.

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