Rupee has held back very well against Dollar: Nirmala Sitharaman
Synopsis
The finance minister said that if there was any one currency that did not get into fluctuation or volatility and had held its own as much as other currencies, it was the Indian rupee.
The Indian currency has held back very well against the US Dollar when compared to other currencies, Finance Minister Nirmala Sitharaman said on Saturday. At the same time, the finance minister said that the Reserve Bank of India and the finance ministry were keeping a very close watch over the developments.
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Speaking to media persons on the final day of her three-day visit to Maharashtra's Pune, which is a stronghold of NCP chief Sharad Pawar, the finance minister said that if there was any one currency that did not get into fluctuation or volatility and had held its own as much as other currencies, it was the Indian rupee
Questioned by the Rupee sinking to a lifetime low against the greenback, the finance minister also asked a reporter to study how the other currencies have been behaving against the US dollar in the latest round of depreciation.
Experts have said that adverse global developments triggered the latest round of depreciation that had started with the geopolitical tensions created by the Russian invasion of Ukraine in February. Besides pushing up commodity prices, the war has led to a record surge in inflation in the developed world. This, in turn, has resulted in steep rate hikes by the US Federal Reserve, leading to currency depreciation episodes.
On Friday, the Rupee slumped 30 paise on the back of risk-off sentiment among investors and strong American currency overseas to close at a fresh lifetime low of Rs 81.09 against the US dollar. On Thursday, the Rupee plunged by 83 paise to close at 80.79 -- its biggest single-day loss in nearly seven months.
To defend the currency, the RBI has been deploying the dollar reserves and exhausting billions of dollars of currency assets in the fight. Besides, incentives are being offered to attract more deposits from the Diaspora.
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