New Delhi: Economic affairs secretary Ajay Seth has dismissed the concerns over depleting foreign reserves as ‘overblown’ and said that India has a fairly large reserve to tide over the current situation.
Forex reserves were down for the seventh time, dropping to $545.65 billion. The reserves, which have been dipping as the central bank deploys it to defend the currency amid a pressure caused majorly by global developments, had declined by $2.23 billion to $550.87 billion in the previous week.
“There has been a depletion as inflows have come down and trade deficit is higher…I don’t see this as a concern, India has fairly large reserves to tide over this situation,” Seth said.
Finance Minister Nirmala Sitharaman said “due to the strength of our microeconomic fundamentals, the rupee is holding out well. The rate of fall of other currencies vis-àa-vis the US dollar has been sharply much more than the Indian rupee”.
She had said Indian currency is far better than many other currencies which have fallen against the dollar.
The RBI’s intervention is to avoid the fluctuations, she had said.
India’s forex reserve had hit an all-time high of $642.453 billion in the week ending September 3, 2021.
Currencies across the world were impacted after the US Federal Reserve last week raised the benchmark lending rate by 75 basis points to a range of 3-3.25 per cent.
The economic affairs secretary said the government intends to stick to the fiscal deficit target of 6.4 per cent for the current fiscal ending March 2023.
“So, we don’t intend to, I will say that path will be adhered to, there is no need to overshoot, we are well into that aspect,” Seth said.
Indian rupee hits all-time low of 81.90 against dollar
New Delhi: The Indian rupee weakened by 37 paise to hit a new all-time closing low of 81.90 against the US dollar on Wednesday as the greenback strengthened against major global currencies. At the interbank foreign exchange market, the Indian rupee slipped below the 82-level for the first time against the US dollar.
The Indian rupee has weakened sharply in recent days largely due to a strengthening of the US dollar.
For the record, the US Federal Reserve had raised the repo rate by 75 basis points. The Fed also hinted that more rate hikes were coming and that these rates would stay elevated until 2024.
The Indian equities witnessed volatile trading amid weakness in the Asian peers. The Sensex started the day with a deep cut at 56,710.13 points and slumped to a low of 56,485.67 points in the intra-day. The markets witnessed some good buying support around noon.