The Indian currency is widely used in Nepal for day-to- day transactions, especially in the border areas.
Delivering a talk on "Nepal Today" organised by the Foreign Correspondents' Club here, Nepal's Ambassador to India Deep Kumar Upadhyay said that Nepal's central bank and the Reserve Bank of India have held several rounds of discussion have been held so that the old Indian Rs 1,000 and Rs 500 could be exchanged by Nepali citizens.
He said that he was happy that the Doklam problem has been resolved in the end.
No country would benefit without peaceful resolution of conflicts, he said.
"As chair country of Saarc (South Asian Association for Regional Cooperation), it is our moral responsibility to ensure peace", he said.
The imbroglio ended just towards the end of August ahead of Prime Minister Narendra Modi's visit to China earlier this month for the BRICS Summit.
India, which has traditionally enjoyed great economic and political ties with Nepal, has faced increasing competition from China in the recent years.
Upadhyay said that when it came to any land dispute between two countries, Nepal always remained neutral, adding that "you can not change the geography, you can not change the neighbour".
Stating that China was also a very friendly country, the Ambassador said that "we are confident that there will be no kind of action from China which will hurt the people of Nepal". "Some kind of a window Nepal must get", he said.
On being asked how challenging it was for the Himalayan nation to manage ties with its two neighbouring giants, the envoy said Nepals position was "neutral", but "India occupies a special place in terms of people-to-people contact".