--By Madan Lamsal

 

The ‘peg’ must have been the second most loved word for Englishmen after ‘sex’, but for Nepalis, it (its meaning to be precise) is unquestionably the first. Whether it is expressed or muted, the presence of the peg is ubiquitous in our daily national or economic life. The moment you touch the Nepali Currency (NC), you are bound to remember that it is strictly pegged to the Indian Currency (IC). You may or may not always believe in the value of the NC, but it is this peg that gives you the confidence you need. 

 

The recent devaluation of the Nepali currency was not an outcome of a downturn in our economy, but was the effect of the NC-IC peg that has a history of more than six decades. If your business has suffered from this devaluation, you are free to shift the peg to console yourself -- a shift from the currency peg to a whisky peg. Do not complain if more than ninety five percent of Nepali bar-tenders cannot say ‘peg’ and often make do with ‘pack’. When asked, ‘Sir would you like a pack?’ you must have the intelligence to understand that he is actually asking if you would like a peg of some alcohol. If you are a novice drinker, just graduated to whisky to drink in a bar from a ‘pouch’ in a tavern, you may be familiar with the ‘pack’ than the ‘peg.’ It is just a question of civilization, not economics.

 

But in our economic system, unlike you, there are big bosses who are more familiar with the ‘peg’ than the ‘pack’, so that they don’t want to pack the peg at any cost. When it comes to packing-up, or stopping the NC-IC peg, they don’t even want to hear it out. They have good reasons for maintaining this status quo until our currency faces the fate of the Zimbabwean dollar when it was in its last days of existence. In other words, the love for this peg is the simplest strategy to make the Nepali richer in no time. If the present rate of devaluation continues, we Nepalis will soon be so rich that we will be paying ten thousand rupees for a cup of tea, one hundred thousand rupees for a kilogram of rice, a million rupees for a kilogram of mutton or cheese, and so on.

 

If you are in the business of stock price analysis or actual stock trading and brokerage and haven’t heard of the capital ‘PEG’, or price/earnings to growth ratio, you are sure to be doomed and forced to take refuge in the smaller ‘peg’ that is re-christened by Nepali barmen as ‘pack’. There are people in the financial service industry in Nepal who argue that ninety-nine percent of our stock brokers, the licensed ones, never heard of the ‘PEG’, or the ‘peg’, and is managing everything with the replacement of the ‘pack’. The result: many of them are, therefore, helping the trading of many scribs to pack-up within a few days of listing instead of using the PEG tool to analyze.

 

If you ask our policy makers -- the finance minister, the central bank governor, or the prime minister as soon as we get one -- ‘How long will the NC-IC peg continue?’ they all will have very intelligent answers for it: ‘Oh! Peg. Yes, we have. Good question, I mean, not bad at all. It is important. How about having a peg together tonight? Thanks!!’

 

You may ask me how I know that their answer would be exactly like that. It is simple: every generation of our authorities for the last half century have said nothing different than this. Feel like listening to the popular number the ‘Peg’ by Steely Dan? Do it in the bar, that’s the place to admire the real beauty of the ‘peg’!