Rupee not sliding, dollar strengthening, says Finance Minister Nirmala Sitharaman : The Tribune India

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Rupee not sliding, dollar strengthening, says Finance Minister Nirmala Sitharaman

Rupee not sliding, dollar strengthening, says Finance Minister Nirmala Sitharaman

Nirmala Sitharaman



Tribune News Service

New Delhi, October 16

Union Finance Minister Nirmala Sitharaman has said the rupee has not weakened, but it is the dollar that has strengthened. Speaking to the media after participating in the annual meetings of the International Monetary Fund (IMF) and World Bank in Washington, she defended the slide in the value of the rupee against the US dollar by asserting that the fundamentals of the Indian economy were strong and inflation was comparatively low.

Indian rupee has performed much better than many other emerging market currencies… We are holding together. Nirmala Sitharaman, FM

The minister also defended the actions of the Enforcement Directorate (ED) and said, “It is completely independent in what it does… if ED goes there, it is because of some prima facie evidence in their hands.” On the rupee, she said, “I would look at it as dollar strengthening incessantly... The exchange rate in favour of dollar strengthening is there and I think the Indian rupee has performed much better than many other emerging market currencies.” The rupee breached the 80-per-dollar mark in July and at last week’s close had hit a record low. Due to the RBI’s offloading of dollars to keep the rupee afloat, foreign exchange reserves have also seen a matching slide. Down by over $90 billion, foreign exchange reserves were $532.87 billion on October 7, as against $ 642.45 billion a year ago.

Sitharaman said inflation was manageable and foreign exchange reserves “good”.

The breach in inflation beyond the comfort level was due to external factors, but “because of various timely measures, we are able to bring it to this level and at least hold it”. “I’m not asking for celebration, but it is true that we are holding together,” she said, acknowledging that fiscal and trade deficits need close monitoring especially with China. The cumulative September trade deficit was $25.71 billion, but Sitharaman pointed out, “If you look into the items that are imported, they are less of final consumption goods and more of intermediaries. It means there also a potential for value addition and exports. So, I wouldn’t want to immediately get anxious about this net deficit.”

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