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Govt blames external factors for rupee’s fall, says nothing to worry at this stage

Economic Affairs Secretary Subhash Chander Garg said the rupee was still performing better than some other currencies, and that the country had sufficient foreign exchange reserves.

business Updated: Aug 14, 2018 15:57 IST
Agencies
Agencies
New Delhi
Rupee fall,US dollar,SBI
US dollar bills and Indian ten rupee banknotes are arranged for a photograph in Mumbai.(Bloomberg)

The government on Tuesday blamed “external factors” for the rupee’s fall to an all-time low against the US dollar and said that there is nothing to worry about as of now.

Economic Affairs Secretary Subhash Chander Garg said external factors may ease going forward.

“Rupee is depreciating due to external factors,” he said. There is “nothing at this stage to worry”.

Any intervention by Reserve Bank of India may not do much to stabilise the rupee as a fall in the currency is due to global factors, Garg said.

He said the rupee was still performing better than some other currencies, and that the country had sufficient foreign exchange reserves.

“As currencies of other economies are also depreciating, intervention by the Reserve Bank of India (RBI), by selling dollars in the country, will not help much at this stage for stabilising the rupee,” Garg told reporters. “Even if the rupee falls to 80, it will not be a concern provided all other currencies depreciate.”

He said the RBI has spent about $23 billion so far to intervene in the market

The rupee hit an all-time low of 70.1 to a US dollar earlier today on concerns over Turkey’s economic woes.

SBI chairman Rajnish Kumar said all currencies have weakened against the dollar, but the Indian currency has not weakened very much in comparison to other currencies.

“I feel that it (rupee) should stabilise between 69 and 70 because if you look at the numbers for investment which is coming into the country -- investment in bonds, investment in equities -- this level has become attractive for foreign investment,” Kumar said.

Research Analyst at Anand Rathi Shares and Stock Brokers, Rushabh Maru said the rupee extended losses today on account of panic demand from importers.

“Given the uncertainty surrounding Turkey crisis and strength in the dollar index, importers are buying dollars aggressively. The RBI has been intervening very selectively in the market. Hence, an absence of aggressive intervention by the RBI has spooked the market,” he said.

First Published: Aug 14, 2018 15:34 IST