Depreciation of the Rupee not an alarming concern, assures Economic Affairs Secretary

New Delhi – Depreciation of the Indian rupee continued on Tuesday and reached Rs 80.05 against the USD. Warnings are being issued that this depreciation is a cause for concern. But Ajay Seth, Secretary of the Economic Affairs Ministry, has assured that there is no need to get alarmed by this. Ajay Seth pointed out that although the Indian rupee has depreciated against the USD, there is an appreciation against GBP, Japanese Yen and Euro. The Secretary of the economic affairs ministry said that the depreciation of the rupee is being handled appropriately, and the Reserve Bank of India has initiated steps in the matter.

Analysts had claimed that the depreciation of the Indian rupee is a cause for concern and points to a looming economic crisis. Some economists pointed out that it is not only the rupee but many currencies have depreciated against the USD. Euro, the collective currency of the Eurozone, also has depreciated. For the first time, the exchange rate for Euro has gone below the USD. Saying that this has never happened before, economists are pointing out that the slide in the value of other currencies is the result of a strengthening USD.

USD became stronger after the US Federal Reserve increased interest rates. Therefore, the rates of currencies of other countries declined against the strengthening USD. The Secretary of the economic affairs ministry pointed this out. At the same time, Ajay Seth pointed out that although the Indian rupee has depreciated against the USD, there is an appreciation against GBP, Japanese Yen and Euro. Therefore, it is not necessary to be alarmed by the rupee depreciation. Ajay Seth reassured the countrymen that the Reserve Bank has initiated the steps required to resolve the problem.

Meanwhile, the Reserve Bank has decided to take the limit for External Commercial Borrowings to USD 1.5 billion from USD 750 million. Hope is being expressed that the flow of foreign investments into the country will increase with this amendment.

Union Minister of State for Finance, Pankaj Chaudhary, also said in the written answer to a question asked in the Rajya Sabha that although the Indian rupee has weakened against the USD, it has appreciated against GBP, Japanese Yen and Euro. The Reserve Bank is continuously reviewing the foreign exchange reserves. Pankaj Chaudhary said that the Reserve Bank takes necessary and appropriate decisions to monitor the ups and downs closely.