New Delhi: Finance Minister Arun Jaitley Wednesday attributed the fall in rupee to global factors and said there was no need for panic or knee-jerk reactions. He further said the Reserve Bank is doing whatever is necessary to deal with the situation.
The rupee’s unabated fall continued for the sixth straight session Wednesday as it hit yet another closing low of 71.75 against the US dollar, tumbling 17 paise. The battered rupee has lost 165 paise in the last six trading sessions. “If you look at the domestic economic situation and the global situation, there are virtually no domestic reasons which are attributable to this. The reasons are global. “I don’t think there is any need for the world’s fastest growing economy to come out with panic and knee-jerk reactions,” he said while replying to questions regarding the fall in rupee.
Jaitley further said the dollar has strengthened against almost every other currency and added that the rupee has consistently either strengthened or remained in a range. “It has not weakened…the rupee is better-off,” he said, adding that the rupee has strengthened against other currencies like the British Pound and the Euro. The minister further said the government has consistently maintained 4 per cent inflation during the last four years. Elaborating his point on global factors affecting the rupee, he said India is a net buyer of crude oil and spike in prices affects the country.
“That’s an external factor. We are not in a trade war business but when countries neighbouring us devalue their currencies that has a corresponding impact on us. Turkey had some impact on us,” he said. The minister further said eventually the inherent strength of the Indian economy has to play a very important role and expressed confidence that fluctuation in the currency market will come down. “I am sure that the currency management in these areas are done by the Reserve Bank of India and they are certainly doing whatever is necessary for this purpose,” he added. Meanwhile, crude prices Wednesday extended their losses, sliding towards USD 77 a barrel.