No collapse of Indian rupee: FM

New Delhi, August 2

The falling value of rupee against the US dollar does not pose any danger, Finance Minister Nirmala Sitharaman said in the Rajya Sabha on Tuesday while adding that “rupee has found its natural force”.

“I want the members to take into cognisance Indian rupee’s performance versus others like the UK pound and so on and contextualise the rupee’s performance versus the US dollar particularly because the various taxes that have been taken by the US Federal Reserve”, Sitharaman, who was replying to a starred question asked by Congress member Vivek K Tankha, said.

Stating that foreign exchange reserves in India were $571.56 billion as on July 22, Sitharaman said, “It is not a small amount”.

“Yes, we have come down to the higher ends of $500 billion from somewhere around $600 billion earlier but we are still comfortably placed”, the FM said. “So there is no collapse (of the rupee), it is actually finding its natural force”, Sitharaman said.

Pramod Tiwari of the Congress mentioned that in 2013, Narendra Modi, who was then Chief Minister of Gujarat, had remarked that the prestige of India took a beating whenever the value of rupee fell against US dollar.

Tiwari asked if there is any possibility of the value of rupee improving (as against the dollar) and some of the prestige that the country lost because of the steady decline in the value of rupee is restored when the country is still celebrating 75 years of freedom.

Sitharaman said Prime Minister Modi made the remark in question when various other perimeters of the country’s economy were also in bad shape.

“India had become one of the Fragile Five countries. There was double-digit inflation in the country for 22 months”, Sitharaman said.

The Finance Minister said despite obstacles like the pandemic, the second wave of Covid, Omicron and the war in Ukraine — all of which were beyond India’s control — Indian currency continues to perform well.

RBI continuously monitoring

The RBI is continuously monitoring and intervening only if there is volatility. RBI’s intervention is not so much to fix the value of Indian rupee which is free to find its own course. — Nirmala Sitharaman, Finance Minister