A day after the rupee plunged to record low, Union Minister Arun Jaitley said India has comfortable foreign exchange reserves to deal with any undue volatility in the currency market and developments are being closely monitored.
The Indian currency yesterday crashed to a life-time low of 70.09 on concerns over Turkey’s economic woes that have impacted various emerging markets, even as the US dollar gained strength against other currencies.
Recent developments relating to Turkey have generated global risk aversion towards emerging market currencies and the strengthening of the dollar, the minister said in a series of tweet.
However, the country’s macro fundamentals remain resilient and strong, said Jaitley, who was holding the charge of finance and corporate affairs ministries before he underwent the kidney transplant on May 14.
Piyush Goyal was given Jaitley’s ministerial portfolios on an interim basis.
“India’s foreign exchange reserves are comfortable by global standards and sufficient to mitigate any undue volatility in the foreign exchange market,” Jaitley said.
The developments in the currency market were being monitored closely to address any situation that might arise in the context of the unsettled international environment, he added.
Reserve Bank’s foreign exchange reserves were at USD 402.70 billion in the week ended August 3, down USD 1.49 billion over the preceding week, latest data released by the central bank showed.
RBI’s stated position is that it does not seek to target a particular level for the rupee’s exchange rate against the dollar and uses its reserves to ease volatility in the currency market.
In the current financial year, which began on April 1, the rupee has depreciated by around 6.7 per cent against the US dollar.