According to Union Finance Minister Nirmala Sitharaman, the Indian Rupee has fared “quite well” versus the US Dollar as compared to other world currencies and has not been as much impacted by “fluctuations or volatility.” She did, however, reassure the audience that the RBI and the government were closely monitoring the issue.
“The Indian Rupee is the only currency that has maintained its value and has not experienced as much fluctuation or volatility as other currencies. We have been extremely restrained “said Sitharaman during a press event in this location. She emphasised once more that both her government and the RBI were closely monitoring the situation. The ministry and the Reserve Bank of India are closely monitoring the situation, she continued. In response to a query, Sitharaman recommended that in addition to evaluating the success of the rupee, it would be wise to consider the performance of the other major currencies.
To inspect a gathering of centrally supported programmes, Sitharaman travelled to Pune. On Friday, the Indian rupee hit a record low against the US dollar, breaking through the 81 level, as the dollar gained strength as a result of the Federal Reserve raising its repo rate.
After the rupee hit its bottom, financial professionals also tried to analyse the issue. Vinod Nair, the head of research at Geojit Financial Services, had stated: “Foreign institutional investors (FIIs) tended to steer clear of developing markets due to an increase in the yield on US 10-year bonds and a strong dollar index. A weak currency, a decline in banking system liquidity, and the existing premium valuation have made the market outlook gloomy for the foreseeable future.”
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Nair continued, alluding to the Indian context, saying that although the world’s development engines are slowing down as a result of central banks’ strict monetary policy activities, India is now in a stronger position because of a pick-up in credit growth and a rise in tax collection. Volatility at the moment could persist for a while. Investors are advised to closely monitor events until they are finished.
