Central Government takes important decisions to tackle depreciation of In

New Delhi: Indian Rupee continues to depreciate, causing a significant concern for the government. The Rupee sliding to 79.11 against 1 US Dollar has triggered worried reactions from various sections of society. On Friday, the Rupee gained 12 paise to close at 78.94. Union Finance Minister Nirmala Sitharaman said that she would be in discussion with the Reserve Bank about the exchange rate. At the same time, the government is trying to manage the exchange rate by raising taxes on gold imports by five per cent and curbing fuel exports.

Moreover, the Russia-Ukraine conflict is imposing economic challenges to all countries. Major world currencies have seen a decline against the US dollar. Inflation has peaked in the US and Europe. India is facing similar economic challenges. This situation calls for the Indian government to decide on the depreciating Rupee against the US dollar. The rise in the oil prices due to conflict in Ukraine, along with macro-economic factors leading to foreign investors taking their money out of India, has caused pressure on the Rupee to depreciate.

Union Finance Minister Nirmala Sitharaman said that she would continuously discuss the exchange rate with the Reserve Bank. She said that the government is aware of the increased cost of imports due to currency depreciation. The government has planned a few steps to curtail the further depreciation of the Rupee. One of them is to tax oil exports. Some oil refining companies have made huge profits by exporting refined oil products due to high international prices. The government had to decide on imposing a tax on such companies to increase supply in India, said finance minister Nirmala Sitharaman. Additionally, the import duty on Gold has been increased from 7.5% to 12.5%.

India imported 107 tons of Gold in May. In June as well, the import of Gold increased. The finance minister Nirmala Sitharaman said that increasing the fiscal deficit is affecting the economy. Hence the government decided to increase 5% the import duty on Gold.