Exchange rate for calculating import duty increased to Rs 79.90/ dollar

8 Jul 2022 , 11:02 AM

For the purpose of calculating import duties starting on July 8, the Finance Ministry set the exchange rate for the dollar at Rs 79.90 on Thursday (07-07-2022), up from Rs 78.95 two weeks prior.

The steep revision results from the rupee’s devaluation against the dollar as a result of capital flight brought on by a variety of external causes, including the world’s rising interest rates.

According to a statement from the finance ministry, the value of the pound sterling has also been set at Rs 96.10, down from Rs 96.70 before. Also, the conversion rate for the euro used to determine taxes on imported products has been set at Rs 82.15, down from Rs 83.10 on June 16.

The dramatic swing in currency rates coincides with the rupee’s 4.1% decline versus the US dollar so far in the current fiscal year (up to July 5). In contrast to other EMEs and even significant advanced economies, it is minor.

The 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 fall. The total foreign exchange reserves have decreased by USD 40.94 billion since February 25.