No move to devalue rupee, says FinMin

Tribune News Service

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New Delhi, September 15

The Finance Ministry today denied any move of rupee devaluation to boost exports though the domestic currency reacted to reports by ending below 67-mark to the US dollar, falling 13 paise to hit over two-week low.

The Finance Ministry officials today said there were no plans at present to devalue the rupee and its value will continue to be determined by market forces.

With exports falling for almost 20 months, there were reports that the Commerce Ministry might discuss with the Finance Ministry about possible rupee devaluation.

Commerce Minister Nirmala Sitharaman, too, said she had not said that the government was discussing rupee devaluation.

“I had no conversation on devaluation of any currency with any news correspondent. Any quotes/mentions referring to me on this topic are baseless,” Sitharaman tweeted.

Economic Affairs Secretary Shaktikanta Das also said rupee is not an administered rate and is governed by market forces.

“The value of rupee is determined by the market and there is no plan to change the policy. The market reports that government wants to devalue the rupee is false,” he told reporters here.

The rupee fell after devaluation reports, but trimmed losses after the Finance Ministry denied these reports.

Commenting on the devaluation reports, Dhananjay Sinha, Head, Institutional Research, Economist and Strategist, Emkay Global Financial Services, said, “In our assessment, the Indian rupee is overvalued considerably. Our projection for INR has been maintained at 68-70.”

He said from the policy stand point the problem is that India has prevented sharp depreciation in the rupee due to fears of capital retrenchment. India mobilised $26 billion in FCNRB deposits in 2013 and further enhanced its foreign exchange reserves. While this ensured stability in exchange rate and financial markets, it has ended up harming India’s competitiveness, he added.