Rupee depreciation caused by external factors: India government

There is nothing to worry about depreciation of Indian Rupee (INR) against US Dollar (USD) as the fall in the currency value is due to external factors and the Indian currency is in line with other currencies of the globe, said Subhash Chandra Garg, India’s Economic Affairs Secretary on Tuesday (14) attributing the depreciation of INR to foreign factors.

INR touched its historic low of 70.09 against UDS on Tuesday (13) on strong global fundamentals. Investors eyed on USD as a safe haven as bearish Turkish currency, lira continued its bearish trend against USD on Tuesday also.

Lira has witnessed a fall of 45 per cent this year following diplomatic issues between US and Turkey and concerns that Turkish president may continue his grip over the domestic economy hurting investors sentiments at large.

Garg expressed his confidence that INR could recover in the near future once external factors ease. He also added that it won’t be a cause for concern if INR dips to 80 per USD as other currencies in the world depreciate in the same range against USD.

In the present fiscal year, which started on April 1, INR has depreciated around 6.7 per cent against the USD.

Garg noted that India’s central bank, Reserve Bank of India (RBI) has enough foreign exchange reserves and RBI is ready for market intervention if required. As of now, there is no need of intervention as INR depreciation is caused by external reasons.

RBI's foreign exchange reserves were at 315.43 billion GBP in the week ended on August 3, a decline of 1.17 billion GBP over the preceding week, according to the latest data from RBI.

State Bank of India (SBI) Chairman Rajnish Kumar has also said, all currencies have fallen against USD, but the INR has not tumbled very much when compared to other currencies in the globe. INR should stabilize between 69 and 70 against USD as the level is more attractive to the foreign investors who invest in the form of bonds, equities, and others, he added.