“If any one currency that did not get into the fluctuation of volatility as much as other currencies, it is the Indian Rupee. We have held up very well against the US dollar,” news agency PTI quoted the FM as saying.
The finance minister’s comments came in the wake of the rupee dropping to a fresh lifetime low against the greenback, as the domestic currency came under pressure from a strong American currency and risk-off sentiment among investors.
On Friday, local currency sunk 30 paise to close at a new lifetime low of 81.09 against the dollar. A day earlier (Thursday), it had fallen by 83 paise, its biggest single-day loss in nearly seven months.
Current currency depreciations around the world are being triggered by geopolitical events caused by the Russia’s invasion of Ukraine.
The war has pushed up commodity prices, causing a record surge in inflation in developed economies. The resultant rate hike by the Fed has triggered a flight of capital from other markets back to the US, which in turn has caused currency depreciations elsewhere.
The RBI has exhausted billions of dollars of forex assets in the fight, as it deploys its dollar reserves to defend the rupee.
Meanwhile, reports arrived that RBI making policy moves to attract more depos-its from the diaspora via further incentives and other such attempts to stem the decline.