Kathmandu – Donald Trump has made a triumphant return as the 47th President of the United States, defeating Democrat Kamala Harris in the recent elections. Known for his nationalist slogans like “Make America Great Again” and “America First,” Trump’s victory is expected to have far-reaching consequences not only for the U.S. but also for the global economy, including Nepal.

As the world’s largest economy, the decisions made by the U.S. president have significant global implications. Following Trump’s win, the value of the U.S. dollar reached historic highs. This increase in the value of the dollar has led to immediate effects on global markets, including falling prices of crude oil and gold.

Strength of the U.S. Dollar and Its Impact on Nepal

With Trump’s victory, the U.S. dollar has strengthened, and as a result, the value of the dollar in Nepal has also risen to an all-time high, reaching NPR 135.16 for one U.S. dollar. This is the highest exchange rate ever recorded. The strengthening of the dollar has made the Indian Rupee weaker, and since Nepal’s currency is pegged to the Indian Rupee, the Nepalese Rupee has also weakened.

While a stronger dollar can be advantageous for Nepal in terms of remittances and exports (as it brings more currency into the country), Nepal’s import-dependent economy suffers when the dollar strengthens. The cost of imports rises, affecting consumer goods and raw materials.

Additionally, with a stronger dollar, Nepal’s foreign debt burden increases, as repayment is typically in U.S. dollars. The exchange rate fluctuation directly impacts the amount Nepal needs to pay in foreign loans.

Falling Prices of Oil and Gold

Following Trump’s election win, the prices of crude oil and gold have started to decline. The stronger dollar has caused the price of crude oil to drop, with Brent crude falling by 0.81% to $74.92 per barrel and WTI crude dropping by 0.42% to $71.69 per barrel. For Nepal, which is entirely dependent on oil imports, this reduction in oil prices is beneficial as it could lower the cost of imported oil.

Similarly, the price of gold has also decreased. After Trump’s victory, the price of gold dropped by 3% over two days, from $2,740 per ounce to $2,657. This decline could result in lower gold prices in Nepal, potentially benefiting gold buyers in the country.

Potential Reduction in International Aid

One of Trump’s key campaign promises has been to prioritize “America First,” which could lead to a reduction or cessation of U.S. funding to international organizations. In his previous term, Trump had already reduced or halted contributions to organizations like the World Bank, the International Monetary Fund (IMF), and the World Health Organization (WHO). If this trend continues, Nepal could see a reduction in international aid, including grants for climate change initiatives and other programs. This could negatively impact Nepal’s economy, especially in terms of development aid and environmental funding.

Expert Opinions on the Economic Impact in Nepal

Chirinjivi Nepal, former Governor of Nepal Rastra Bank, suggests that the immediate effect of Trump’s victory and the stronger U.S. dollar may not be felt right away due to Nepal’s current foreign currency reserves. However, if the flow of remittances continues at its current pace, the reserves will increase, which could further strengthen the external sector.

Nepal’s economy will also experience the effects of declining oil and gold prices. If these trends continue, it could provide some relief to Nepal’s import costs, though the overall economic impact of Trump’s victory remains to be seen.

In conclusion, while Trump’s victory has already led to a stronger U.S. dollar and falling prices of oil and gold, the full impact on Nepal’s economy will depend on how global markets and Trump’s policies evolve over the coming months.