Nirmala Sitharaman, the Union Finance Minister, claimed on Saturday that when compared to other currencies, the Indian rupee had “held back extremely well” versus the US dollar. Her comments were made when the value of the Indian rupee relative to the US dollar touched a record low.
The Indian rupee is the only currency that has maintained its value and has not experienced as much fluctuation or volatility as other currencies. The finance minister was quoted by the news agency PTI as adding, “We have held back extremely well.”
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The Reserve Bank of India and the finance ministry, according to her, are “very closely watching” the situation. A reporter was also tasked by Sitharaman, who is on a three-day visit to Pune, Maharashtra, to conduct research on how other currencies are faring against the US dollar in the most recent round of devaluation.
Due to the strong US dollar outside and investors’ risk-off attitude, the rupee lost 30 paisas and fell to a new lifetime low of 81.09 against the US dollar on Friday, according to PTI. The previous day (on Thursday), the rupee plummeted by 83 paise to settle at 80.79, marking its largest one-day loss in over seven months (its previous record low).
The rupee lost 124 paise versus the US dollar in this, its third straight session of losses. The PTI report also stated that the rise in geopolitical risk in Ukraine and rate increases by the US Fed and Bank of England to control inflation weakened risk appetite.
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Experts claim that the conflict in Ukraine increased commodity prices and caused a record rise in global inflation, which led the US Federal Reserve to raise interest rates dramatically.
The RBI has been using its dollar reserve to protect the Indian rupee, depleting billions of dollars’ worth of foreign exchange reserves in the process. In addition, policies have been implemented to stop the loss by providing additional incentives and other means of luring deposits from the diaspora.
