Nepalis will spend billions over the holiday season on food, clothes, precious metals, and drinks. This is the time of year when many will paint their houses, shops and offices and change all the electric fittings and bulbs. One will often hear many people say that it was yet another difficult year for the Nepali economy; but on the other hand we will see for ourselves how much “disposable income” is all around. The cash flow, literally, will be in new and crisp notes that will be coveted by everyone. Printing textbooks for children may be a challenge, but not new currency notes for the festivals.
Today the Nepali currency is not in circulation outside the political boundaries of Nepal. It is pegged to the Indian currency and is available in all denominations from five to a thousand. During the reign of Mahendra Malla (1560-1579AD) historians tell us that silver coins known as the “mohar” was brought into circulation is Nepal. This currency spread in use all the way to Tibet. The trade between Nepal and Tibet continued to grow till the end of the 18th century. The silver coins were minted in Nepal and brought great prosperity to the Kathmandu valley. The silver came from Tibet and minted here for a good margin of profit. During the middle of the 18th century, Kathmandu was blockaded by the Gorkhalis from the west and trade with Tibet began to decline. War is and was expensive. The Nepali currency began to lose its value.
During the Regency of Bahadur Shah (1788-89AD) the silver coins used to facilitate the Nepal –Tibet trade had begun to be “less in weight and not pure”. The Tibetan traders began to refuse to accept Nepali coins. Further, the war of Nepal’s annexation, begun by King Prithvi Narayan Shah, was still on and Nepal was in political transition. Trade was declining as a result. There was fear that “fake” coins were in circulation as well. The rulers in Kathmandu wanted to replace old coins with new ones but could not agree on the exchange rate for the old ones. Regent Bahadur Shah tried to resolve the issue through “talks” but failed and then decided to resort to military options. In 1988 AD the Nepalis Army entered Tibet from Kuti and kerung commanded by Damodar Pandey and Amar Singh Thapa. A new treaty was drafted and a cease fire declared; but the issues were not resolved.
To cut a long story short, the Chinese Emperor decided to step into the dispute with his powerful army and in August 1792 AD started an offensive against the Nepali forces. When the Chinese troops reached the banks of the Betrawati River, north of Kathmandu, Nepal decided to call a truce and signed a treaty. This treaty established formal links between Beijing and Kathmandu. Nepal lost its trade and mint monopoly in Tibet. Today we can look at a piece of Nepali “paper” currency and appreciate that “it has been through a lot. As we go out and pay for the goats, ducks and chicken, or the new vehicle or a piece of jewelry, let us take some time to appreciate our currency heritage.