Rupee 'Held Back Very Well' Against US Dollar: Finance Minister Nirmala Sitharaman

Due to the war, the prices of different commodities have witnessed a hike, resulting in steep rate hikes by the US Fed. This has led to a flight of capital back to the US, hence resulting in currency depreciation episodes.

Rupee 'Held Back Very Well' Against US Dollar: Finance Minister Nirmala Sitharaman
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Union Finance Minister Nirmala Sitharaman on Saturday said the rupee has "held back very well" when compared to other currencies against the US Dollar.

Sitharaman also mentioned that the Reserve Band and the Finance Ministry are keeping a close eye on the developments after the domestic currency sunk to a lifetime low against the greenback.

"If any one currency which has held its own and did not get into fluctuation or volatility as much as other currencies it is the Indian rupee. We have held back very well," she said as quoted by the news agency PTI.

The Finance Minister who is on the final day of her three-day visit to Pune district, a stronghold of NCP chief Sharad Pawar, also asked a reporter to do a study on how the other currencies are behaving against the US dollar in the latest round of depreciation.

Meanwhile, on Friday, the rupee deprecriated 30 paise to close at a fresh lifetime low of 81.09 against the US dollar. On Thursday, the rupee plunged by 83 paise -- its biggest single-day loss in nearly seven months -- to close at 80.79, its previous record low.

As per the experts, the latest round of depreciation is triggered by adverse global developments starting with the geopolitical tensions triggered by the Russian invasion of Ukraine earlier this year.

Due to the war, the prices of different commodities have witnessed a hike, resulting in steep rate hikes by the US Fed. This has led to a flight of capital back to the US, hence resulting in currency depreciation episodes.

The RBI, however, has been deploying the dollar reserves to defend the currency and has exhausted billions of dollars of currency assets in the fight.

Meanwhile, there have also been policy moves to allure more deposits from the diaspora through further incentives and another such attempt to control the depreciation.

Earlier, while speaking about the currency depreciation, Gaurang Somaiya, Forex and Bullion Analyst, Motilal Oswal Financial Services had said that most of the currencies are under pressure as the dollar continues to strengthen.

"Rupee fell to fresh all-time lows against the US dollar after the Fed raised rates earlier this week. Most of the currencies are under pressure as the dollar continues to strengthen," he had said as quoted by the news agency PTI.

"We expect the USD-INR (Spot) to trade sideways and quote in the range of 80.40 and 81.20," added Somaiya.

(With inputs from PTI)

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