RUPEE’S ‘REAL’ DEPRECIATION SO FAR THIS YEAR AT 67%: IMF

The real effective depreciation of the rupee this year as compared to December 2017 is between six and seven per cent, according to the International Monetary Fund (IMF) which warned that it would jack up the prices of imported goods such as oil and petroleum products, potentially putting an upward pressure on inflation.

Since the beginning of the year, the Indian rupee “has lost about 11% of its value in nominal terms vis a vis the US dollar”, the IMF spokesperson, Gerry Rice said.

He was responding to a question on the fall of the Indian currency in the last few months.

He, however, said the currencies of many of India’s trading partners, including those in the emerging markets, too have depreciated against the dollar.

“As a result, so far this year the real effective depreciation of the rupee compared to December 2017, by our estimates, is between six and seven per cent,” Rice said.

Observing that India is a relatively closed economy, he said the contribution of the net exports to growth in the April to June quarter was again stronger than expected and the real depreciation of the rupee can expected to reinforce this trend.

“On the other hand, the depreciation will obviously raise the prices of imported goods such as oil and petroleum products, potentially putting an upward pressure on inflation,” he said.

The Reserve Bank of India has taken the rising oil import prices into the account when it raised the policy rates in its last two meetings, he noted.

WASHINGTON: