Mumbai: Indian rupee on Tuesday hit a fresh record low of 80.06 against the US dollar amid surge in crude oil price and foreign fund outflow.
On Monday, Finance Minister Nirmala Sitharaman quoted RBI data and said that the value of the rupees declined from 63.33 against a dollar on December 31, 2014, to 79.41 on July 11, 2022.
In reply to a starred question in the Lok Sabha, Sitharaman said, “global factors such as the Russia-Ukraine conflict, soaring crude oil prices and tightening of global financial conditions are the major reasons for the weakening of the Indian Rupee against the US dollar.”
However, she informed the lower house of the parliament that the Indian currency has strengthened against other major global currencies.
“Currencies such as the British pound, the Japanese yen and the Euro have weakened more than the Indian rupee against the US dollar and therefore, the Indian rupee has strengthened against these currencies in 2022,” the Finance Minister said.
RBI intervenes in case of excess volatility
The Reserve Bank of India (RBI) regularly monitors the foreign exchange market and intervenes in situations of excess volatility. It has raised interest rates in recent months that increase the attractiveness of holding Indian rupees for residents and non-residents.
Earlier this month, 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.
The RBI increased the ECB limit under the automatic route from USD 750 million or its equivalent per financial year to USD 1.5 billion, and eased norms for foreign portfolio investments in the debt market.
With inputs from agencies