1) Does Nepal government or the central bank need to have gold reserves for every unit of money they print ?
No, the Nepali government is not required to have gold reserves for every unit of money they print. The Nepali currency, the Nepalese Rupee, is a fiat currency, which means that its value is not directly linked to the value of any physical commodity, such as #gold or #silver.
Instead, the value of the Nepalese Rupee is based on a combination of factors such as the strength of the economy, inflation rate, interest rates, and foreign exchange rates.
The Nepal Rastra Bank, as the central bank of Nepal, is responsible for managing the money supply and ensuring that the value of the currency remains stable.
However, it is worth noting that having gold reserves can be seen as a way to back the currency and provide confidence to the public in the stability of the currency. Many countries do hold gold reserves as a hedge against economic uncertainties or as a means to facilitate international trade.
The United States has the largest gold reserve, with more than 8,133.5 metric tons of gold. This was more than twice the gold reserves of Germany and more than three times the gold reserves of Italy and France. While Nepal has a gold reserve of 7.99 tonnes.
Despite having a massive gold stockpile, the United States is experiencing significant inflation. The #US government ceased pegging the #USD to gold in 1971 and began printing money at will, resulting in the current problem, but inflation is caused by a variety of variables
Nonetheless, it is not a requirement for a country to have gold reserves to print money.
2) Can Nepali government print as much money as they like ?
No, the Nepali government cannot simply print as much money as they like without facing potential consequences such as inflation, economic instability, and loss of trust in the currency.
Printing money without an increase in goods and services leads to inflation, which can decrease the currency's value and hurt the economy.
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