1 Paisa – Nepal

In 1902, Nepal’s currency system was a complex and dualistic structure, firmly under the control of the autocratic Rana dynasty. The country operated on a bimetallic standard, but one that was uniquely segregated. The official state currency, used for government transactions and external trade, was the silver Mohar and its subdivisions. However, alongside this, a system of copper coins (Dams and Paisa) circulated widely for everyday local trade. The critical feature was that these two systems had no fixed legal exchange rate between them, leading to fluctuating and often exploitative conversion practices by money-changers (Sarrafs), which created significant inconvenience and uncertainty in the domestic economy.

This period also saw Nepal's monetary policy deeply influenced by its economic relationship with British India. The Nepalese Rupee (the term for the larger silver unit) was deliberately kept on a par with the Indian Rupee to facilitate cross-border trade, which was vital for the landlocked kingdom. A substantial portion of state revenue came from the pensions of Nepalese Gurkha soldiers serving in the British Indian Army, paid in Indian currency. This influx necessitated a stable exchange, but it also made Nepal's economy peripherally dependent on British India's monetary stability and policies.

Internally, the currency situation reflected the Rana regime's isolationist and conservative governance. While neighboring countries were modernizing their minting techniques, Nepal's coins were still struck using traditional hammer methods at the mint in Kathmandu. There was no central bank; the treasury (Gol Khana) managed coinage primarily for state revenue rather than economic development. Consequently, in 1902, Nepal's currency system was not a tool for national economic integration but rather a mechanism of control, characterized by internal complexity, external dependency, and technological stagnation, mirroring the broader political climate of the era.