No Need To Be 'Overtly' Worried About Fall In Rupee, Says Economic Affairs Secretary

Economic Affairs Secretary Ajay Seth on Tuesday said that the rupee is managed well and there is nothing to be "overtly" worried about the depreciation in the domestic currency against the US dollar.

The Indian currency, he said, has appreciated against several global currencies like British Pound, Japanese Yen and Euro.

This has made imports in these currencies cheaper compared to the US dollar.

The rupee for the first time touched a low level of 80 against the US dollar in intra-day spot trading at the interbank foreign exchange market on Monday.

The local unit recovered from its all-time low of 80.05 to close 6 paise higher at 79.92 against the US dollar on Tuesday, showing a loss of 7.5 per cent or 563 paise against the greenback in 2022 so far.

The economic affairs secretary attributed the fall of the rupee against the greenback to the tightening of interest rate by the Federal Reserve which resulted in the flow of dollars to the US from across the world.

"If you recall the RBI has taken extensive steps just two weeks back to facilitate that process (flow of capital). So, whatever actions are needed are being taken. So, we should not get overtly worried about this. It is being managed, managed well, in terms of taking care of the (forex) volatility," he said.

Earlier this month, the RBI raised the overseas borrowing limits for companies and liberalised norms for foreign investments in government bonds as it announced a slew of measures to boost foreign exchange inflows.

The RBI increased the ECB limit under the automatic route from $750 million or its equivalent per financial year to $1.5 billion, and eased norms for foreign portfolio investments in the debt market.

Seth further said that the RBI does not look at a particular level for the rupee but acts to contain excess volatility.

Earlier in the day Minister of State for Finance Pankaj Chaudhary too said the Indian rupee has strengthened against major currencies such as the British pound, the Japanese yen and the Euro though it has weakened against the US dollar.

The Reserve Bank of India (RBI) regularly monitors the foreign exchange market and intervenes in situations of excess volatility, he said in a written reply in the Rajya Sabha.

The Reserve Bank of India has raised interest rates in recent months that increase the attractiveness of holding Indian rupees for residents and non-residents.