According to a finance ministry official, the rupee’s decline to below 83 to the US dollar is not unusual, and currency rate fluctuations are not unique to the Indian rupee. He expressed the hope that the RBI’s measures to control inflation will take exchange rate volatility into account. On Thursday, the rupee reached an all-time intraday low of 83.16 to the US dollar, and on Friday, it closed at a record-low 83.10. The decline in the rupee made imports, which India relies on for its needs in electronics, fertiliser, and oil, more expensive.
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The official from the Finance Ministry told PTI that the current volatility of the rupee was unimportant because exchange rates are always unstable and the rupee is no exception when US yields change.
The official said when asked if the change would cause inflation to rise because imports would be more expensive: “That is, of course, a problem, but I’m confident the Reserve Bank will keep it under consideration.
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The official continued, “FX market fluctuations are normal and nothing abnormal or unique to the Indian rupee.”
Because currency rates are so volatile, these items might easily go the other way. It is still too early to predict how long this rate will remain stable, the official said.
The Indian rupee started declining this month after strengthening for the majority of this year due to foreign investment.
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