Union Finance Minister Nirmala Sitharaman on Tuesday said there is no collapse in the value of the Indian rupee and in fact, its performance against the US dollar is better than other major global currencies.
Replying to a question in the Rajya Sabha, Finance Minister said, "even there, the performance of the Indian rupee is much better than its own peers, which withstood the impact of the US Fed's decision much better than any other peer currencies".
"And actually, if you compare Indian rupee versus other currencies, it is appreciating in its manner," said Sitharaman while replying to Trinamool Congress MP Luizinho Joaquim Faleiro's question raised in the House during Question Hour.
The Finance Minister said as Faleiro mentioned "the rupee has depreciated 28 times by 34 per cent and "I was reading today's newspaper which says it will further depreciate. And, the fact is that the foreign exchange reserve has declined to US dollar 572 billion by mid-July because of the pressure of costly imports of crude oil, coal, and gold".
Replying to the MP, Sitharaman further said, "Let us please understand the context and speak about the Indian rupee. There is no collapse."
"I would like to assure the member that there is no collapse of the Indian rupee. And, also to speak about the reserves coming down, we are still somewhere in the range of - let me give you what I had this morning -as of 22nd July, it was at $571.56 billion reserves," said the Minister.
"Therefore, it is not a small amount. Yes, when it was in the range of 600 and now it has come down in the range of higher-ends of 500, 571 and so on, we are still comfortably placed."
So, Sitharaman said, "I want the House to take into cognizance Indian rupee's performance versus others, whether it is the UK pound and so on; and, therefore, it is contextualised Indian rupee's performance versus the US, particularly, because of the various steps which are being taken by the US Fed."
Therefore, the Finance Minister continued, "collapse, it is actually finding its natural course."
"As I said, the RBI (Reserve Bank of India) is continuously monitoring it; monitoring and intervening only if there is volatility. The RBI's interventions are not so much to fix the value of the Indian Rupee because it is free to find its own course," added the Minister.
The Finance Minister's statement came days after Chief Economic Advisor (CEA) V Anantha Nageswaran said that the depreciation of the rupee against the US dollar has been lower than other major global currencies such as the Euro, the British pound and the Japanese yen.
He then attributed the depreciation in the rupee and other currencies against the US dollar to the aggressive monetary tightening by the US Federal Reserve.
As a result, the outflow of foreign capital is taking place from various emerging economies including India, putting pressure on their domestic currencies.
( With inputs from ANI )
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