2 Paisa – Nepal

In 1891, Nepal's currency situation was characterized by a complex and fragmented system, heavily influenced by its political and economic relationship with British India. The dominant circulating medium was the Mohar, a silver coin minted by the state. However, the system was not decimalized; one Mohar was subdivided into 128 Dams, and transactions also commonly involved Indian Rupees and smaller, often crudely struck, local copper coins. This multiplicity created confusion in trade and accounting, as values had to be constantly calculated across different units.

The year 1891 fell within the reign of Prime Minister Bir Shumsher Jang Bahadur Rana (1885–1901), a period of modernization attempts. A key development was the establishment of the Bir Shumsher Mint in Kathmandu in 1889-90, which began producing more standardized machine-struck coins. By 1891, these new coins—including the silver Mohar and half-Mohar—were entering circulation, slowly displacing the older, hand-hammered coinage. This move represented a significant step toward monetary unification and state control over currency.

Despite these internal reforms, the Nepalese economy was inextricably linked to India. The Indian Rupee was legal tender and circulated widely, especially in the southern Terai region and for larger commercial transactions. This dual-currency reality meant Nepal’s monetary policy was effectively pegged to the Indian standard. Consequently, while the Rana regime sought to modernize its coinage for prestige and internal efficiency, it could not achieve true monetary sovereignty, remaining within the economic orbit of the British Raj.