Rupee Relatively Better Placed Than Other Global Currencies Against US Dollar: FM

Mumbai: Amid a declining rupee against the US dollar, Finance Minister Nirmala Sitharaman said that the Indian currency is relatively better placed than other global currencies against the US dollar.

“We are not alone in this world… so events happening everywhere will affect us. But the rupee against the dollar and other currencies versus the dollar, the rupee has performed relatively better,” Sitharaman told reporters in New Delhi on the sidelines of an event.

“The Reserve Bank Governor is periodically in touch with me, giving me inputs about how the Reserve Bank is monitoring the situation.”

The minister said he is “very attentive and careful” about the immediate impact of rupee depreciation in terms of making imports costlier.

On July 1, the rupee fell to a new record low of 79.1187 against the dollar. The unit is falling in line with other emerging market assets as the global macroeconomic crisis escalates.

Foreigners also continue to withdraw money from Indian equities. Rising inflation and the rise in crude oil have also hurt the rupee. Economists are concerned about the rising current account deficit.

The government earlier today increased the duty on gold and imposed a tax on the export of petroleum products to curb imports.

RBI Deputy Governor Michael Patra last week said that the central bank will not allow any depreciation of the rupee.

“We don’t know where the rupee will be, even the Fed (US Federal Reserve) does not know where the dollar will be. But be sure of one thing, we will stand for its stability,” Patra had said.

The RBI does not target a level for the rupee but seeks to lower volatility in its exchange rate.

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