Finance Minister Nirmala Sitharaman on Sunday rejected criticism over the slide of the Indian rupee, saying it has depreciated solely towards a strengthening US greenback however remained secure towards all different currencies due to the sturdy macroeconomic fundamentals.
In an interview with PTI, she stated a 3 per cent depreciation within the rupee towards the US greenback in previous few months is a matter of concern because it makes imports costlier, however she rejected criticism that the native forex has seen all-round weak spot.
“I’m involved however I can’t settle for the criticism that ‘Oh Rupee is weakening!’ Our macroeconomic fundamentals are sturdy. Rupee would not be secure towards all of the currencies if the basics have been weak,” she stated.
The Indian rupee has been underneath strain in the previous few months however it continues to be the least unstable forex towards the US greenback amongst its Asian and world friends. The explanations for the rupee hitting document lows nearly each day towards the US greenback vary from widening commerce deficit to a surge within the greenback index after the US Federal Reserve hinted at fewer fee cuts in 2025.
The Reserve Financial institution has reportedly spent $77 billion from its international trade reserves to defend the rupee from falling sharply within the spot market, taking India’s international trade reserves right down to $629.557 billion as on January 30, 2024, from $701.176 billion on October 4, 2024.
“Rupee’s volatility is towards the greenback. Rupee has behaved in a much more secure vogue than every other forex,” Sitharaman stated. Rupee volatility is noticeable because the greenback is strengthening.
“RBI additionally has been methods during which it’ll intrude available in the market solely to stabilise the necessity for avoiding enormous volatility based mostly causes. So we’re all intently watching the scenario,” she stated.
She termed critics pointing to rupee volatility and depreciation as “a really fast argument”.
“However in at the moment’s greenback strengthening surroundings and within the new US administration, the rupee must be understood in its relationship with the greenback (and) the fluctuations which come on account of that. Criticisms can come, however these criticisms can even should go together with a response with a bit extra examine,” she added.
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