Rupee Strong Against All Currencies, RBI Infusions Added Muscle: FM – The Economic Times*

Clipped from: https://economictimes.indiatimes.com/epaper/delhicapital/2022/dec/13/et-brands/rupee-strong-against-all-currencies-rbi-infusions-added-muscle-fm/articleshow/96181701.cms

Synopsis

Finance minister Nirmala Sitharaman Monday asserted that the Indian rupee has remained strong against every currency and that the Reserve Bank had used forex reserves to intervene in the market to prevent volatility in the currency vis-à-vis the dollar.

Finance minister Nirmala Sitharaman Monday asserted that the Indian rupee has remained strong against every currency and that the Reserve Bank had used forex reserves to intervene in the market to prevent volatility in the currency vis-à-vis the dollar.

She said the RBI had sold $33.42 billion in the foreign exchange market in the first six months of the current fiscal.

“The Indian rupee has been strong against every currency. (The) Reserve Bank has used foreign exchange reserves that it has to intervene in the market to make sure that the dollar-rupee fluctuation does not go too much,” Sitharaman said in Lok Sabha.

As global spillovers from geopolitical tensions and aggressive monetary policy tightening across the world intensified alongside a surge in crude oil prices, the US dollar strengthened by 7.8% in 2022-23 (till November 30, 2022), she said.

She added while the rupee had depreciated 6.9%, it still performed better than most Asian peer currencies including the Chinese renminbi (10.6%), Indonesian rupiah (8.7%), Philippine peso (8.5%), South Korean won (8.1%) and Taiwanese dollar (7.3%).

She was responding to Congress MP Anumula Revanth Reddy, who had sought to know whether the government had taken note of the fact that the Indian currency is “weakening day-by-day and has hit ₹83 per US dollar for the first time”.

The exchange rate of the Indian rupee against the greenback hit a record high of ₹83.20 per dollar on October 20, 2022. The value of the rupee is market-determined.

She added that the RBI announced various measures in the recent period to expand sources of forex funding to mitigate exchange rate volatility, including a hike in the external commercial borrowing limit to $1.5 billion and raising the all-in-cost ceiling by 100 basis points in select cases up to December 31, 2022.

To boost exports from India and support the increasing interest of the global trading community in the rupee, the RBI put in place an additional arrangement for invoicing, payment, and settlement of exports/imports in the rupee on July 11, 2022.

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