‘No worries about rupee value; RBI is handling instability’, said Union Finance Secretary
New Delhi| Finance Secretary Tuhin Kant Pandey has responded as the rupee hit a record low of 87.29 against the dollar. He said that there is no concern about the value of the rupee and the Reserve Bank of India is handling the volatility of the local currency. “There is no concern about the value of the rupee”, Pandey told reporters. Rupee fluctuations are being controlled by RBI.” He said the Indian rupee is a “free-float” and there is no control or fixed rate applicable on the currency. He said that due to continuous outflow of foreign capital, the exchange rate is under pressure.
Fears of a widespread trade war have arisen after Trump imposed tariffs on Canada, Mexico and China. Meanwhile, the rupee fell 67 paise to a record low of 87.29 against the dollar in early trade.
Forex traders have said Donald Trump has imposed 25 percent tariffs on Canada and Mexico and 10 percent on China. This step is the first step towards a devastating global trade war. In the year 2025, the Indian rupee will depreciate by 1.8 percent to the dollar level from the level of 85.61 rupees per dollar as of 31 December 2014. The US currency strengthened in foreign markets due to continued outflow of foreign capital and continued demand for the dollar and weak risk appetite among oil importers, putting pressure on the rupee.
Foreign institutional investors (FIIs) sold equity worth Rs 1,327.09 crore on a net basis in the capital markets on Saturday, according to exchange data. Meanwhile, India’s foreign exchange reserves rose by $5.574 billion to $629.557 billion in the week ending January 24, the Reserve Bank said on Friday. Due to this, this stock had decreased by US$ 1.888 billion to $ 623.983 billion in the last week.
There has been a declining trend in foreign exchange reserves for the last few weeks, and the reason for this decline is due to revaluation as well as interference in the foreign exchange market by the Reserve Bank of India (RBI) to reduce the volatility in the rupee.
