Stepping off of the plane at Kathmandu’s Tribhuvan airport from an international flight you will pass through the visa checkpoint. This is your last opportunity to unload some of your US dollars before entering the realm of the Nepalese Rupee (NPR) in paper and coin. The exchange rate has hovered around 75 NPR to 1 US dollar for the past five years. In early 1995 it was just under 50, and in January and November of 1998 there were sudden jumps (or drops from the Nepalese perspective) in the rate of exchange, with a shift of 11 NPR within a year. This is probably not the most telling statistic when it comes to describing the state of Nepal’s economy and their international trade, although it is of interest to tourist who make up a significant part of Nepal’s revenues. The most significant trading partner with Nepal is India, and considering the relative magnitude of their neighboring economy it seems that India could easily crush Nepal with any misstep. Nepal does have a heavy trade deficit, and that is primarily (~55%) with India. Nepal does not have that much to offer as export, but relies on many industrial and foodstuff imports.

Interestingly, the Indian Rupee currency is freely circulated and accepted as tender for whatever it is you can buy in Nepal. That reminds me of how it opens economic options if you live along the border of the United States and Canada. Soda machines with prices in US currency will take both American and Canadian coins, so the obvious exploit is to pay Canadian and get refreshment at an “international discount”. I don’t know if any such circumvention is available between Nepal and India, but it is most likely that Nepal would be on the losing end. For visitors to Nepal it is an easy task to exchange currency either at a hotel or at one of the many small exchange shops around Thamel.

If you’re staying in another part of Kathmandu or even in the outlying farmlands it may be a little more effort, and I’m not sure if banks dabble in converting currency. I remember someone telling me that it was a bad idea to work through a bank because they would make it a drawn out bureaucratic experience as punishment for bothering them. In the Khumbu region I did see one more exchanger in Namche, though the rates would a bit less favorable. Again, Nepal’s currency is another thing I can’t complain about because I know what tourism in Western Europe was like before the European Union instituted a uniform currency. In the span of an afternoon you could wander across 5 or 6 borders each requiring their own distinct currencies. The best policy then was just to pack a lunch and avoid buying anything.