The minister said, “The government and the RBI are in dialogue to examine how best we may have many such initiatives through which we are able to collect foreign remittances directly,” but he insisted that the RBI would have the final word.
The minister continued by saying that despite the rupee’s recent record-breaking decline to rising in recent sessions, it was not collapsing but rather was simply following its natural course. The RBI states that its actions “are essential for reducing volatility… not so much for deciding the value, raising it, or decreasing it.”
“The RBI constantly monitors the value of the rupee and only acts when there is volatility. Since the Indian rupee is free to choose its own path, the RBI’s action is less about fixing its value.”
The rupee strengthened 12 paise to 78.94 vs the US Dollar in early trade on August 2, helped by foreign money inflows and a weak US dollar relative to some of its major rivals abroad. Additionally, dealers noted that a decline in crude oil prices improved the outlook for the domestic FX market.
By 11.40 am, the Indian rupee had risen to a level above that of the previous month and had gained more than Rs 1.25 against the US dollar in three sessions. Over the previous 16 months, the rupee is set to see its largest one-day rise.
Notably, after reaching a record low of 80.06 on July 21, the INR has increased by 2%. The rupee is now down 5.4 percent over the last 24 hours and -7.5 percent over the previous week when compared to the US dollar.
The rupee rose quickly during the morning transaction at the interbank foreign exchange, initially quoting at 78.96 versus the US dollar before gaining additional ground to quote at 78.94, representing a gain of 12 paise from the previous close. The rupee’s closing price versus the US dollar in the previous session was 79.06.
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