Compared to other global currencies, the Indian rupee is considerably better placed against the dollar: FM Nirmala Sitharaman

30 Jun 2022 , 03:14 PM

The Indian currency is comparably better positioned than other foreign currencies versus the US dollar, according to Finance Minister Nirmala Sitharaman, notwithstanding the rupee’s decline against the greenback.

Amid geopolitical tensions following the Russia-Ukraine war, worries about growth, high global crude prices, prolonged inflation, and central banks all over the world adopting hawkish monetary policy approaches, emerging market currencies have been losing value against the dollar.

“We are in a better position than most. We don’t have an isolated economy. We live in a globally interconnected world. Thus, the effects of global developments will be felt by us, “On the margins of an event in this location, the finance minister remarked. Regarding the movement of the rupee against the dollar, she was responding to a query.

On Wednesday, the rupee crossed the psychologically crucial 79-per-dollar threshold for the first time ever. This month, it has also touched a number of lifetime lows. In contrast, the local currency on Thursday increased 13 paise to 78.90 against the US dollar in early trade.

The Reserve Bank of India (RBI) has used up its foreign exchange reserves since the conflict in Ukraine started in late February in an effort to protect the rupee from a sharp depreciation. The total foreign exchange reserves have decreased by USD 40.94 billion since February 25. The Reserve Bank’s deputy governor last week, Michael D. Patra, highlighted that the rupee has had the least recent decline and that the central bank will not let “jerky fluctuations” of the currency.

“We are defending its stability and will continue to do so. We are present in the market and we will not permit the movement of the rupee to be chaotic. We don’t have a certain level in mind, but we won’t accept the jerky motion. That much is certain “According to Patra.