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The Minister of Commerce and Industry, Piyush Goyal, acknowledged on Tuesday that the depreciation of the rupee is harmful to the economy, but said that the currency of India has had a better performance than most colleagues in emerging markets. Highlighting the world economic challenges, including the strong growth of the United States and high interest rates, Goyal said that, although many currencies have seen strong decreases, the depreciation of rupee has been relatively modest.
“Depreciation is a bad thing. We believe that in the long run, we must focus on a stronger currency because we are still a country dependent on importation, ”Goyal said while we talk in the Round Budget Table of India Today-Business today. Almost half of the rate of competing economies.
“The depreciation of rupee does not necessarily help the Indian economy, so I am happy that our depreciation is much less than that of competing economies,” said the minister. Attributed the recent depreciation pressures to global factors, including strong indicators of economic growth in the United States and interest rates of the persistently high United States. “In the world, due to the strong growth numbers of the United States and their focus on building its growth history much faster, there has been a capital of return to the United States. In addition, interest rates in the The United States continues to be very high.
However, Goyal emphasized that India’s monetary performance should be compared not only to the US dollar but also with other emerging markets. “Indian rupee is one of the best performance coins among emerging market economies. Our depreciation is approximately half in terms of percentage: we have approximately 2.8-3% compared to 5.5-6% that Most of the other competitive economies have seen, “he,” he, “he,” he, “he has seen,” he, “he,” he has seen, “he has seen,” he has seen, “he He has seen, “he has seen.” fixed.
Goyal also pointed out that the depreciation of the rupe has significantly slowed down in recent years. “If you study the depreciation of the rupee until 2014 versus from 2014, you will see a pleasant story. From 1947 to 2014, the rupee depreciated in approximately 5.5% per year. Since 2014 until now, it is around 2.5%,” he noted.
Indian rupee has faced greater volatility in recent weeks, marked by a strong drop from 57-Paise to 86.62/USD on January 28, 2025, it is the largest daily fall in almost two years. This decrease, followed by a historical minimum of 87.29/USD on February 3, comes from global commercial tensions, particularly the new US rates in China, Canada and Mexico, which caused a feeling of risk.
Foreign portfolio investors (FPI) withdrew $ 11 billion of Indian shares in the third quarter of fiscal year 2015, while debt departures increased when the 10 -year performance differential between the United States and India reached a minimum of a minimum of two decades. The Bank of the Reserve of India (RBI) has reduced its Forex interventions, allowing the rupe to move more freely, while Forex reserves have fallen at $ 70 billion since September 2024. In addition, an index of Increased dollar, 6.5% since October 2024, has been more emerging market currencies, including INR.
