Rupee depreciation against US dollar lower than other major currencies: CEA

Chief Economic Advisor (CEA) V Anantha Nageswaran on Wednesday said that the depreciation of the rupee against the US dollar has been lower than other major global currencies such as the Euro, the British pound and the Japanese yen.

He attributed depreciation in rupee and other currencies against the US dollar to the aggressive monetary tightening by the US Federal Reserve.

As a result, outflow of foreign capital is taking place from various emerging economies including India, putting pressure on their domestic currencies.

“Japanese yen, Euro, Swiss franc, British Pound have depreciated much more against dollar (than the rupee),” he said on the sidelines of an event here.

Both the government and RBI have taken measures to check the outflow of dollars and encourage inflow of foreign funds so that the depreciation of the domestic currency can be contained, he said.

Earlier this month, the Reserve Bank of India (RBI) announced new liberalised rules to attract foreign inflows. Besides, the government has also raised import duty on gold imports.

The RBI raised the overseas borrowing limits for companies and liberalised norms for foreign investments in government bonds as it announced a slew of measures to boost foreign exchange inflows.

It has also increased interest rates in recent months, thus increasing the attractiveness of holding Indian rupees for residents and non-residents.

The rupee for the first time touched a low level of 80 against the US dollar in intra-day spot trading at the interbank foreign exchange market on Monday.

The domestic currency has depreciated about 7.5 per cent against the greenback in 2022 so far.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor