Indian Rupee has not collapsed, it is finding its own course: FM Nirmala Sitharaman

By Vipin Vijayan | First Published Aug 2, 2022, 5:47 PM IST

Finance Minister Nirmala Sitharaman tells Parliament that MPs should take into account the Indian Rupee's performance in comparison to other currencies and contextualise its performance versus the US Dollar

Finance Minister Nirmala Sitharaman on Tuesday asserted that the Indian Rupee has not collapsed but is rather finding its natural course. The minister's remarks come amid concerns over the decline in the value of the Rupee against the US Dollar.

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The Reserve Bank of India is continuously monitoring the local currency and intervening only if there is volatility, Sitharaman informed the Rajya Sabha, adding that the RBI interventions are not intended to fix the value of the Rupee as it is free to find its own course.

She further said that the RBI interventions are aimed more at containing volatility between the Indian rupee and the US dollar and so on.

"Even the interventions being made by RBI are not so much to determine the value - increase or decrease, of the Indian rupee. It is not for that. It is more to avoid the volatility and allow it to find its course.

"India, like many other countries, is not pitching its currency at a level extraneously. So the ways and which we want to strengthen... the RBI and the Ministry are fairly engaged in it," she said as members expressed concerns over the decline in the value of the Indian currency.

On suggestions that non-resident Indians should be allowed to make remittances in foreign currency, the finance minister said she will pass of the suggestion to the RBI.

Sitharaman said the rupee's performance is better than its peers despite seeing more fluctuations against the US dollar. "We have withstood the impact of the US Fed's decisions much better than any other peer currencies," she told the House.

Urging the members to understand the context and speak about the Indian rupee, Nirmala said actually, if you compare the Indian rupee versus other currencies, the Rupee was appreciating in its value.

"I would like to assure the member that there is no collapse of the Indian Rupee," she asserted.

On the reserves coming down, she said, "We are still somewhere in the range of $500 (billion).

She said that as of July 22, the country's foreign reserves were at $571.56 billion reserves which, according to the minister, is not a small amount and that the country is still comfortably placed.

She told the Rajya Sabha that the House should take into account the Indian Rupee's performance versus other currencies and contextualise the performance of the Indian rupee versus the US Dollar, particularly because of the steps that are being taken by the US Fed," she told the Rajya Sabha.

"There is no collapse. It is actually finding its natural course. The RBI is continuously monitoring it and intervening only if there is volatility. RBI interventions are not so much to fix the value of the Indian rupee because it is free to find its own course," Sitharaman said.

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With PTI Inputs

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