Rupee held back very well against US dollar compared to other currencies: FM
Union finance minister Nirmala Sitharaman on Saturday said the Indian rupee has “held back very well” against the US dollar in comparison to other currencies. Her statement comes even as the Indian currency hit a record low against the US dollar.“If any one currency which has held its own and did not get into fluctuation or volatility as much as other currencies, it is the Indian rupee. We have held back very well,” the finance minister was quoted as saying by news agency PTI.Also Read | India’s forex reserves hit near 2-year lowShe said that the Reserve Bank of India and the finance ministry are keeping a “very close watch” on the situation.Sitharaman, who is on a three-day visit to Pune in Maharashtra, also asked a reporter to do a study on how the other currencies are behaving against the US dollar in the latest round of depreciation.The rupee depreciated 30 paise to close at a fresh lifetime low of 81.09 against the US dollar on Friday, weighed down by the strong American currency abroad and risk-off sentiment among investors, PTI reported. A day before (on Thursday), the rupee slumped by 83 paise – its biggest single-day loss in around seven months – to close at 80.79 (its previous record low).This was the third straight session of loss for the rupee during which it lost 124 paise against the US dollar. Citing forex traders, the PTI report added that escalation of geopolitical risk in Ukraine and rate hikes by the US Fed and Bank of England in order to check inflation eroded risk appetite.According to experts, the Ukraine war pushed up commodity prices, triggering a record increase in inflation in the developed world, which has resulted in steep rate hikes by the US Fed.The RBI has been deploying the dollar reserve to defend the Indian rupee and has exhausted billions of dollars of currency assets in the process. There have also been policy moves to attract more deposits from the diaspora via further incentives and other such attempts to stem the decline.
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