With the establishment of the central Nepal Rastra Bank, Nepal began to gain control of its foreign exchange reserves , which until 1960 were channeled through the Central Bank of India. Indian currency, prevalent throughout the country and freely convertible, was separated from other foreign currencies. In 1983, in order to counter economic instability and increased inflation, the exchange rate of the Nepalese rupee was weighted against a basket of important currencies such as the U.S. dollar. In reality, the Nepalese currency is quite strongly influenced by fluctuations of the Indian rupee. The value of the Nepalese rupee has been in decline for years; as of June 2001, US$1 was equivalent to 74.66 Nepalese rupees. Inflation was moderate at 11.8 percent in 1999, but imported goods are still beyond the reach of many Nepalese. While economic growth was strong in the late 1980s, the temporary breakdown of the trade treaty with India significantly damaged the economy.
In 1993, the Nepal Stock Exchange was born out of the Securities Exchange Centre. Interest has exceeded expectations, though only a minority of the urban population is involved in the stock market. The minimal development of the industrial sector limits opportunities for investment.