Finance Minister Nirmala Sitharaman said on Saturday that the rupee has “held back very well” compared to other currencies against the US dollar.
The Reserve Bank and the Finance Ministry are closely monitoring developments, the finance minister told reporters after the domestic currency sank to a lifetime low against the dollar.
“If there is one currency that has held up and not come into swings or volatility as much as other currencies, it is the Indian rupee. We have held back very well,” she told reporters here on the last day of her three days. visit to Pune district which is a stronghold of NCP chief Sharad Pawar.
She also asked a reporter to do a survey on how the other currencies are behaving against the US dollar in the latest round of depreciation.
According to experts, the latest round of write-offs has been triggered by adverse global developments starting with the geopolitical tensions triggered by the Russian invasion of Ukraine earlier this year.
The war pushed up commodity prices, leading to record high inflation in the developed world, which has resulted in steep interest rate hikes by the US Federal Reserve. This has resulted in a flight of capital back to the US, which has resulted in episodes of currency depreciation.
The rupee fell 30 paise to close at a fresh lifetime low of 81.09 against the US dollar on Friday, weighed down by the strong US currency overseas and risk-off sentiment among investors.
On Thursday, the rupee plunged 83 paise – its biggest single-day loss in nearly seven months – to close at 80.79, its previous record low.
The RBI has deployed its dollar reserves to defend the currency and has used up billions of dollars of foreign exchange funds in the fight.
There have also been political moves to attract more deposits from the diaspora through additional incentives and other such attempts to arrest the fall.
(This story has not been edited by NDTV staff and is automatically generated from a syndicated feed.)