Amid concerns over the decline in the value of the rupee against the US dollar, Finance Minister Nirmala Sitharaman asserted Tuesday that there is no collapse of the unit and it is actually finding its natural course. Nirmala 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.
She further said that the RBI interventions are aimed more at containing volatility 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.
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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.