Finance Minister Nirmala Sitharaman said the Indian rupee is holding its own at a time when the dollar has strengthened, assuring that the fundamentals of the Indian economy are strong and inflation is low compared to other parts of the world.
Speaking to reporters on Saturday after completing her trip to the city where she attended the annual meetings of the International Monetary Fund and World Bank, Sitharaman also said inflation was at manageable levels.
“Indian economic fundamentals are good, macroeconomic fundamentals are good. The foreign exchange reserve is good. I keep repeating that inflation is also at a manageable level,” Sitharaman said.
In response to questions, Sitharaman, who also holds 24 bilateral and about a dozen multilateral meetings on the sidelines of IMF and World Bank meetings, said she would like to bring inflation further below 6 percent and the government is making efforts to do so.
#CLOCK | US: Treasury Secretary Nirmala Siharam responds to ANI question on Indian rupee’s depreciation against the dollar as geopolitical tensions continue to rise and actions being taken to manage the decline pic.twitter.com/cOF33lSbAT
— ANI (@ANI) October 16, 2022
Referring to the fact that several countries in the world like Turkey are facing double-digit inflation, she said that the countries are very much affected by external factors.
“We are also influenced by external factors. We are also affected. But due to the various actions we take timely each time, we can bring it to that level or at least keep it. Ideally at that point it’s just very good to get it to four, but we’re trying,” she said.
“So we have to be aware of the position we are taking compared to the rest of the world. I’m not asking for celebrations, but it’s true that we stand together. And I’m particularly aware of the budget deficit,” Sitharaman said.
When asked about the Indian rupee’s slide, she replied that it was due to the stronger dollar.
“All other currencies perform against a strengthening dollar. I’m not going into technical details but the fact is that the Indian rupee has probably withstood this rise in the dollar rate, the exchange rate is there in favor of a dollar strengthening and I think the Indian rupee has fared much better than many Emerging markets currencies,” she said.
She said the Reserve Bank of India is making more efforts to ensure there is too much volatility.
“It’s not about intervening in the market to set the value of the rupee. So curbing volatility is the only exercise the RBI is involved in. And I said that before, the rupee will find its own level,” Sitharaman said. PTI