No Rupee Collapse, Finding Natural Course, Says Finance Minister: 10 Facts
- Finance Minister Nirmala Sitharaman in the Rajya Sabha said that the rupee has not collapsed. It is actually finding its natural course and the fluctuations to record lows are driven more by the dollar.
- The fluctuations in the Indian rupee are more vis-a-vis the dollar, said Ms Sitharaman, referring to its recent record lows, including the breach of 80 per dollar for the first time ever.
- The performance of the Indian rupee is better than its peer currencies, she said, referring to other emerging market currencies.
- We have withstood the impact of US Fed decisions much better than other currencies, said the Finance Minister, referring to the aggressive interest rate hikes by the US central bank, which lifted the dollar to multi-decade highs.
- The rupee is now appreciating vis-a-vis other currencies, added Ms Sitharaman, underscoring the broad-based dollar gains and the Indian currencies' appeal.
- The Reserve Bank of India is continuously monitoring it and intervening only if there is volatility, said the Finance Minister.
- The RBI interventions are not so much to fix the value of the Indian rupee, because it is free to find its own course, she said.
- For its part, the RBI has stepped in to shore up the rupee by selling dollars in the spot and futures market.
- RBI Governor Shakthikanta Das had said "you buy an umbrella to use it when it rains!', indicating that the central bank is using foreign exchange reserves to deal with currency volatility.
- Mr Das had also said that by curtailing sudden and volatile shifts, the central bank has ensured that expectations remain anchored and the forex market functions in a stable and liquid manner. The rupee has gained significantly and swiftly recently from record lows.
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