There is no collapse in Indian
rupee, asserts FM Sitharaman
Amid
concerns over the decline in the value of the rupee against the US dollar,
Finance Minister Nirmala Sitharaman on Tuesday asserted there is no collapse of
the unit and it is actually finding its natural course. Sitharaman informed the
Rajya Sabha that the RBI is continuously monitoring the local currency and
intervening only if there is volatility.
"The
RBI interventions are not so much to fix the value of the Indian Rupee because
it is free to find its own course," the minister told the Rajya Sabha
during Question Hour.
Replying
to supplementaries, she said interventions that are happening from the RBI side
are more for containing volatility that is happening between the Indian rupee
and the US dollar and so on.
"Even
the interventions being made by RBI are not so much to determine the value -
increase or decrease, of the Indian rupee. It is not for that. It is more to
avoid the volatility and allow it to find its course.
"India,
like many other countries, is not pitching its currency at a level
extraneously. So the ways and which we want to strengthen... the RBI and the
Ministry are fairly engaged in it," she said as members expressed concerns
over the decline in the value of the Indian currency.
On
suggestions that non-resident Indians should be allowed to make remittances in
foreign currency, she said it is not an assurance that the Ministry of Finance
will give but she can only pass on the suggestion to the RBI.
Sitharaman
said the rupee has seen more fluctuations against the US dollar but its
performance is better than its peers. "We have withstood the impact of the
US Fed's decisions much better than any other peer currencies," she told
the house.
Actually,
if you compare the Indian rupee versus other currencies, it is appreciating in
its value, she said, urging the members to understand the context and speak
about the Indian rupee.
"I
would like to assure the member that there is no collapse of the Indian Rupee,"
she asserted.
On
the reserves coming down, she said, "We are still somewhere in the range
of (USD) 500 (billion).
As
of July 22, it was at USD 571.56 billion reserves, she said, adding that it was
not a small amount and India is still comfortably placed. "So, I want the
house to take into cognizance the Indian rupee's performance versus others,
whether it is the UK Pound and so on and contextualise the performance of
Indian rupee versus the US, particularly because of the steps that are being
taken by the US Fed," she told the Rajya Sabha.
"There
is no collapse. It is actually finding its natural course. The RBI is
continuously monitoring it and intervening only if there is volatility. RBI
interventions are not so much to fix the value of the Indian rupee because it
is free to find its own course," Sitharaman said.
Earlier,
TMC member Luizinho Faleiro claimed in the last six months, the rupee
depreciated 28 times by 34 per cent and foreign reserves declined to USD 572
billion by mid-July.
Recalling
the remarks of Narendra Modi when he was chief minister of Gujarat, Pramod
Tiwari of the Congress asked when the value of the rupee will increase.
The
finance minister replied that when the then Gujarat CM and now Prime Minister
had made comments on the Indian currency, the economy was in serious shape on
all other parameters.
"The
reason for his comments then was that India had double-digit inflation for 22
months in a row. India had become a fragile economy. Today there is a recovery
from the pandemic, the second wave, the Ukraine war India's currency is still
strong, please keep it in mind in Amrit Kaal," she said.
Earlier,
Minister of State for Finance Pankaj Chaudhary said the government is making
efforts on the declining value of the Indian rupee.
During
the UPA from 2004-2014, he said the value of the rupee in a year was down 10-12
per cent, whereas during the NDA government in the last eight years since 2014,
the decline in the rupee is much less. He said that the US Dollar value has
increased by 4.54 per cent.
www.economictimes.indiatimes.com
dt. 05.08.2022