Govt Blames External Factors for Rupee Fall, Says Nothing to Worry Even if it Hits 80 Per Dollar

[Spartan]

Attributing the fall in rupee value against the US dollar to "external factors", Economic Affairs Secretary Subhash Chandra Garg said on Tuesday there is nothing to worry about as long as the depreciation is in line with other currencies.

The rupee crashed to record low of 70.09 during the day on global concerns over Turkey's economic woes which have impacted various emerging markets amid the US dollar gaining strength against other currencies.

"Rupee is depreciating due to external factors...nothing at this stage to worry," Garg said adding external factors may ease going forward.He said that even if the rupee falls to 80 per dollar, "it will not be a concern provided all other currencies depreciate in the same range".
The Indian currency, he said, is still better as compared to certain other currencies.

In the current financial year, which began on April 1, the rupee has depreciated around 6.7% against the US dollar.



Garg also said that while the Reserve Bank of India had sufficient foreign exchange reserves, its intervention in the currency market may not be of much help as of now, as the weakness in the rupee was a result of global factors.

RBI'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.

Meanwhile, SBI Chairman Rajnish Kumar said all currencies have weakened against the dollar, but the Indian currency has not weakened very much in comparison to other currencies.

"I feel that it (rupee) should stabilise between 69 and 70 because if you look at the numbers for investment which is coming into the country -- investment in bonds, investment in equities -- this level has become attractive for foreign investment," Kumar said.

B Prasanna of ICICI Bank said the rupee is the victim of a contagion effect impacting all Emerging Markets (EMs) triggered by the Turkish crisis.

"The gradual pace of depreciation witnessed till the 69 figure levels are a result of the Yuan depreciation and the current account deficit worsening sharply from 0.6 per cent of GDP in FY'17 to an expected deficit close to 2.5 per cent of GDP this year, stemming from surging oil prices and worsening of the already negative basic Balance of Payment (BoP)," he said.

He opined that on a medium term basis, the rupee will need to depreciate further to keep up with the inflation differentials with other trading partners.

 

[psycopk]

lol chekka..

[Android_Halwa]

Exactly. We now have enough foreign exchange reserves and this is caused by external factors and dollar strengthening, not by domestic issues. 

We can expect few more billions of $ of foreign exchange to be added to the economy in this meanwhile and strengthen more. 

We have been making rupee payments to buy oil and it seems this is now working in our favour. We just have to wait for fully convertible rupee, which I see happening by 2025 and a permanent solution for frequent currency valuations will be put into cold storage. 

[Android_Halwa]

Just now, psycopk said:

lol chekka..

As usual. 

[kevinUsa]

80rs aitay baga undu  

1000$ = 80000 inr 

full happies 

 

[Android_Halwa]

Just now, kevinUsa said:

80rs aitay baga undu  

1000$ = 80000 inr 

full happies 

 

Yeah, and you would end up paying heavy interest rates too . 

[kevinUsa]

Just now, Android_Halwa said:

Yeah, and you would end up paying heavy interest rates too . 

i paid  allmy loans 

no loans all savings now

 

[Marsmangalodu]

5 minutes ago, psycopk said:

lol chekka..

neeku eenadu ABN tappa world economics gurinchi enduku baa

[Spartan]

"The gradual pace of depreciation witnessed till the 69 figure levels are a result of the Yuan depreciation and the current account deficit worsening sharply from 0.6 per cent of GDP in FY'17 to an expected deficit close to 2.5 per cent of GDP this year, stemming from surging oil prices and worsening of the already negative basic Balance of Payment (BoP)," he said.

[Android_Halwa]

1 minute ago, kevinUsa said:

i paid  allmy loans 

no loans all savings now

 

You probably might have paid back all the loans. But imagine you have lot of needs that needs to be fulfilled to live life. 

For example, you want to dip biscuits in tea, the manufacturer of biscuit and tea will be having loans on which they pay interest and if that interest gets more, the retail price would also be increased. 

Like wise, interest rate hike will increase commondity and services prices all across the market sending out a signal that it not a favorable environment. 

[nuzvid_mamidikaya]

39 minutes ago, psycopk said:

lol chekka..

CBN emanna advice evvachu kadha to bring it back to 40

[coupons4all]

Cbn ki vaddantana credit indulo?

[Rishii]

4 minutes ago, Android_Halwa said:

You probably might have paid back all the loans. But imagine you have lot of needs that needs to be fulfilled to live life. 

For example, you want to dip biscuits in tea, the manufacturer of biscuit and tea will be having loans on which they pay interest and if that interest gets more, the retail price would also be increased. 

Like wise, interest rate hike will increase commondity and services prices all across the market sending out a signal that it not a favorable environment. 

Lol chekka ani @psycopk saying no 

[boeing747]

39 minutes ago, kevinUsa said:

80rs aitay baga undu  

1000$ = 80000 inr 

full happies 

 

agree, more INR for $

[boeing747]

5 minutes ago, Android_Halwa said:

You probably might have paid back all the loans. But imagine you have lot of needs that needs to be fulfilled to live life. 

For example, you want to dip biscuits in tea, the manufacturer of biscuit and tea will be having loans on which they pay interest and if that interest gets more, the retail price would also be increased. 

Like wise, interest rate hike will increase commondity and services prices all across the market sending out a signal that it not a favorable environment. 

biscuit evadu cheap ga iste aadi dggara kontaru vayya...endi nee logic asalu.