Finance Minister Nirmala Sitharaman said on Saturday that the rupee has “held up very well” compared to other currencies against the US dollar.
The Reserve Bank and the Finance Ministry are closely monitoring developments, the finance minister told reporters after the national currency sank to a record low against the dollar.
“If there is one currency that has held up and hasn’t had fluctuations or volatility as much as other currencies, it is the Indian rupee. We have held up very well,” he told reporters here on the final day of his three-day show. visit Pune district, which is a stronghold of CPN chief Sharad Pawar.
He also asked a reporter to do a study on how other currencies are performing against the US dollar in the latest round of depreciation.
According to experts, the latest round of depreciation is triggered by adverse global events that began with geopolitical tensions triggered by the Russian invasion of Ukraine earlier this year.
The war pushed up commodity prices, causing a record rise in inflation in the developed world, leading to sharp rate hikes by the US Federal Reserve. This has resulted in a capital flight back to the US, resulting in episodes of currency depreciation.
The rupee fell 30 paise to close at a new record low of 81.09 against the US dollar on Friday, pressured by the strength of the US currency abroad and risk-off sentiment among investors.
On Thursday, the rupee fell 83 paise, its biggest single-day loss in almost seven months, to close at 80.79, its previous record low.
The RBI has been deploying dollar reserves to defend the currency and has depleted billions of dollars in currency assets in the fight.
There have also been policy moves to attract more diaspora deposits through more incentives and other similar attempts to stop the slide.
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