No need for a knee-jerk move on rupee: Jaitley
NEWDELHI: Finance Minister Arun Jaitley on Wednesday said there is no need for panic or for a kneejerk reaction in view of the rupee’s sharp depreciation, because it is driven by global factors.
“If you look at the current economic situation, no domestic reason can be attributed to it. The reasons are global. The upheaval will eventually settle down and the inherent strength of the economy will play an important role,” Jaitley said while briefing media after the Cabinet meet which was chaired by prime minister Narendra Modi. The Indian currency is the worst performing among Asian currencies this year, and has lost 12.3% against the dollar since January 1.
On Wednesday, it fell further against the US dollar on concerns of contagion from other emerging markets. During the day, it hit a fresh low of 71.97 a dollar but recovered mildly on the intervention of the Reserve Bank of India. The rupee ended at 71.76 a dollar, down 0.27% from Tuesday’s close of 71.57. This is the sixth consecutive session when the currency
THE INDIAN CURRENCY IS THE WORST PERFORMING AMONG ASIAN CURRENCIES THIS YEAR
fell. Jaitley said the US dollar has strengthened against all currencies. “Most currencies have weakened against the dollar. Rupee has been better off compared to other currencies,” he added. The finance minister said external factors such as the oil price rise and the currency war also impacts India. “We are a net buyer of oil. When crude oil price goes up, it adversely impacts us. We are not in a trade, but if countries in the neighborhood devalue their currency, it impacts us,” he added.
Defending the National Democratic Alliance (NDA) government’s record of inflation against the previous government’s, Jaitley said the BJP when in opposition before 2014 was right in criticizing the United Progressive Alliance (UPA) government as there is a significant difference between the the double digit inflation witnessed during the UPA’s term and the under-4% inflation during the current NDA government’s.