According to Nepal Rastra Bank's exchange rate, the buying and selling rate of 1 Australian dollar were NRs.93.20 and NRs.93.59 respectively in a certain day. a) How much Nepali currency can be…

a) Exchange of AUD 5,000 to Nepali Rupees (NRs)

The selling rate of 1 AUD = NRs. 93.59 is used to convert AUD to NRs (since the bank sells foreign currency to the buyer).

$$\text{Total NRs}=5000\times 93.59=467,950$$

Answer: NRs. 467,950

---

b) New Exchange Rate After 1.5% Devaluation

A 1.5% devaluation of NRs means the Nepali currency loses value, so the exchange rate increases (more NRs per AUD). Current selling rate = NRs. 93.59.

$$\text{Increase}=93.59\times \frac{1.5}{100}=1.40385$$ $$\text{New selling rate}=93.59+1.40385=94.99385\approx \text{NRs. 94.99}$$

Answer: NRs. 94.99 per AUD

---

c) Profit/Loss on Exchanging AUD 5,000 After Devaluation

• Before devaluation: NRs. 467,950 (from part a)
• After devaluation (new rate = NRs. 94.99): $$5000\times 94.99=474,950$$
• Difference (Profit/Loss): $$474,950-467,950=7,000(\text{Profit})$$

Answer: Profit of NRs. 7,000