Major Economic Headlines & Analysis from Nepal for 6th to 12th May 2020

Nepali Rupee slides to an all-time low against the US dollar

Did You Know on May 10 the value of the Nepali Rupee slid to an all-time low against the US dollar at Rs.123.65 per Dollar??

So what’s the reason behind such unprecedented depreciation and how would it impact the Nepalese Economy?

Considering that the Nepali Rupee (NPR) is pegged against the Indian Rupee (INR) at 1 NPR= 1.6 INR, the depreciation of NPR against the US dollar is due to the appreciation of the US dollar against the INR and other currencies.

And there are mainly three reasons why the US dollar has appreciated so much, putting it on pace for its biggest annual gain in six years.

What ails Bhairahawa Special Economic Zone?

Despite the fact that a month has passed since the government promised to slash rental charges to half in the empty and forlorn Bhairahawa Special Economic Zone (SEZ), the Government still hasn’t lived up to its promise citing that discussions were still underway in that regard.?

But the high rental charge is only the tip of the iceberg that explains why there are only seven factories operating inside this export-oriented enclave despite it being nearly two decades since construction was completed in 2003.?

In any case, the maiden SEZ of the country is a perfect example of how not to run an SEZ. The Government should learn this lesson as it furthers its plan to construct SEZs in all seven provinces.

From Scarcity to Wastage

I am sure we all still harrowingly recall the period from 2008 to 2018 as the ‘dark ages’ when we suffered from power outages of up to 18 hours daily due to acute electricity shortage in the country.

Considering how power-starved we were five years back, this might seem unbelievable to you guys but currently, our surplus electricity is going to waste as we have neither been able to fully consume it nor export it. According to the Nepal Electricity Authority (NEA), Nepal faced a wastage of 500 MW of electricity worth Rs 5 billion during the rainy season last year.

The current crisis we are facing is not an energy crisis but a crisis of energy management having its root in the myopic vision of the Government that can be traced down to three reasons.

1. Failure of the Government to launch the domestic consumption scheme on time
2. Outdated and inadequate transmission infrastructures?
3. Lack of strong institutional mechanisms for cross-border electricity trade to export surplus electricity.

Want to have an in-depth understanding of these factors? We got you covered. Click here to read it all.

Nepal slips in global ranking in mobile broadband speed

Nepal’s mobile broadband speed was slow, to begin with, but the already slow connection is getting relatively even slower, says the latest report by Ookla, a US-based web service that provides free analysis of internet access performance metrics.

As per the?Speedtest?Global Index reported by the company, Nepal has slipped to the 109th spot among 142 countries in mobile broadband speed in May, which is a staggering drop of 22 points in ranking from 88th position in May last year.?

Want to know all about it? Click here.

Vote, and vote wisely

So did all of you vote in the May 13 elections to elect leaders at your respective local levels? I hope you all did and did it wisely because local representatives that you elect are the ones that connect the state with the people and also it is through them the state delivers its services to its people.?

Local-level elections are a hallmark of a democracy and are important in strengthening the federalism that the country adopted in 2015. It is also important to hold elected representatives accountable.?

So be sure to exercise your voting right wisely, which is both your right and your duty. Remember, this is when you vote in the general election in November of this year.

That's all for the week and if you want to read the detailed coverage, click here! Also to know more on what we do, check our offerings and initiatives here!