Rupee below 83 not abnormal; currency fluctuation not exclusive to India- Finance Ministry official

Rupee below 83 not abnormal; currency fluctuation not exclusive to India: Finance Ministry official

The rupee dipping below 83 to a US dollar is not abnormal and the fluctuation in currency rate is not exclusive to the Indian currency, a finance ministry official said, hoping that RBI’s inflation control steps will factor in exchange rate volatility.

The rupee hit an all-time intra-day low of 83.16 to a US dollar on Thursday and settled at a record closing low of 83.10 on Friday. The fall in the rupee made imports on which India is dependent for meeting its oil, electronics and fertiliser, costlier, fuelling inflationary concerns.

Asked if the fluctuation would impact inflation as imports will be costlier, the official said: “That is, of course, an issue but I’m sure the Reserve Bank will keep it under consideration when they take their decisions.” The official further said fluctuations in foreign exchange markets “are normal and nothing abnormal or exclusive to the Indian rupee”.

“These things can also reverse as exchange rates are very volatile… It is too early to say that this rate will hold for a long time,” the official added.

After appreciating for the most part of this year, the Indian rupee started depreciating this month as global investors reduced their exposure to emerging markets on expectations of higher interest rates in the US and deepening concerns over the Chinese economy.

The rupee which was at 82.6 to a dollar as of December 2022 end, depreciated to an all-time closing low of 83.10 on Friday.