The rupee is the official currency of the Federal Democratic Republic of Nepal, a Himalayan nation situated between India and China. It is subdivided into 100 paisa and is most commonly abbreviated as Rs. The rupee was introduced in 1932 as a replacement for the 17th century silver mohar. The sole issuing authority of the rupee is the Nepal Rastra Bank, the central bank of Nepal. Although the Nepalese rupee floated on the foreign exchange for some time, in 1993 it was pegged to the Indian rupee at a rate of 5 INR: 8 NPR.
The Nepalese rupee is not a fully convertible currency. Foreign exchange is rigidly controlled by the government though the use of two official rates, the government rate and the bank rate. Visitors exchanging currency within the country must hold on to receipts in order to exchange their Nepalese rupees upon exit, and then only 10 to 15 percent of the original exchange may be converted back to the original currency.
The Nepalese rupee was introduced in 1932, replacing the silver mohar at a rate of 1 rupee: 2 mohar. The mohar had been in use since approximately 1650 A.D. The rupee is currently circulated through coins and banknotes. Coins are minted in denominations of 1, 5, 10, 25 and 50 paisa and 1, 2, 5 and 10 rupees. Banknotes are printed in denominations of 5, 10, 20, 25, 50, 100, 500 and 1000 rupees.
The rupee is issued by the Nepal Rastra Bank, which was established as the central bank of Nepal in 1956. The bank acts as a modern central bank by carrying out such duties as setting monetary policy, overseeing foreign exchange and managing foreign reserves.
The economy of Nepal is based primarily on agriculture and services. Agriculture comprises 40 percent of the GDP and employs 76 percent of the working population. The services sector also comprises 40 percent of the GDP but only employs 18 percent of the workforce. The third leading sector is industry, which accounts for 20 percent of the GDP and employs 6 percent of the workforce. Tourism was once important for the economy, but the hospitality industry has fallen since 2009. The economy is helped by Nepal’s close relationship from India, but it is still dependent on foreign aid. The major obstacles hindering economic growth include a lack of skilled labour and a poverty rate approaching 50 percent of the population.