Don’t get too worried over rupee depreciation, says Sanyal

Don’t get too worried over rupee depreciation, says Sanyal

FPJ BureauUpdated: Wednesday, May 29, 2019, 06:50 AM IST
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Bengaluru : Principal Economic Adviser to the Finance Ministry Sanjeev Sanyal on Wednesday sought to allay concerns over the falling rupee against the US dollar, saying India should not get too swayed by a single bilateral exchange rate.

“If you take any broad based basket, you will see that the rupee is not especially weak. We cannot get too swayed by a single bilateral exchange rate,” Sanyal said.

He was responding to a question over the hue and cry raised over the rupee recently breaching the historic low of 70-mark against the dollar. The falling rupee value should be seen as strengthening of the US Dollar rather than weakness of the rupee because the rupee has been stable over the last five years against most global currencies, Sanyal said.

“The rupee has been very stable over the last five years against most global currencies, except the dollar.

Hence, we should see this as dollar strengthening rather than rupee weakness,” he said.

Sanyal said the RBI, the competent authority for managing the exchange rate, has more than adequate forex reserves to manage sharp movements.

“The RBI has a well-established mechanism that allows the rupee to find its own level in the medium-term, but manages volatility in the short-term.

It has more than adequate forex reserves to do and manage sharp movements,” he said. The rupee had recently crashed below the 70-mark in early trade to touch an all-time low of 70.10 against the dollar due to worries over the Turkish economic crisis and a sharp plunge in the Lira.

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