FM Sitharaman says the rupiah has not collapsed

Rupee performing better than its peers: FM Sitharaman says the rupiah has not collapsed

New Delhi: Union Finance Minister Nirmala Sitharaman on Tuesday defended the Indian rupee’s recent decline against the US dollar saying the currency has not collapsed and swings at record highs are more motivated by the dollar. FM said the Rupee’s performance is better than its peer currencies.
FM Sitharaman further added that the government and the Reserve Bank of India (RBI) are finding ways to increase inflows into the country. “The ways in which we want to enhance the inflow of foreign currency into India are very many and RBI and the ministry are quite committed to it,” the finance minister told the upper house of parliament in response to a question from a legislator.

Explaining that the RBI’s interventions are not so much aimed at fixing the value of the Indian rupee as it is free to find its own course, Sitharaman shared that the central bank intervened to shore up the rupee by selling dollars in the market. spot and forward. .

“There are discussions between the government and the RBI to see how we can set up different similar schemes through which we can attract foreign remittances directly,” the minister said. The RBI continuously monitors the rupee and only intervenes when there is volatility.

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The rupee crosses the 80 mark against the dollar

The rupiah broke through the psychological 80 mark on July 19 for the very first time. This drop in the rupiah and other Asian currencies is largely due to the underlying strength of the US dollar and outflows from foreign portfolio investment (REIT) stocks.

Recently, the Center listed a host of reasons why the rupee has reached historic lows in recent months. These include economic disruption related to Covid-19, US-China trade war, soaring crude oil prices, Russian-Ukrainian war.

Currencies like the British pound, the Japanese yen and the euro have weakened more than the Indian rupee against the US dollar and as a result, the Indian rupee has strengthened against these currencies in 2022, had said the government.

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