The rupee has depreciated 6% against the dollar this year, weighing it down due to a broader strength in the dollar and investors pulling out from the domestic stock markets.
The rupee has depreciated 6% against the dollar this year, weighing it down due to a broader strength in the dollar and investors pulling out from the domestic stock markets.
India is trying to “remove volatility” in the Indian rupee, which has plunged to record levels against the dollar in recent weeks, a government official said on Monday, in a broader trade. Amid concerns over losses and asset sales by foreign investors.
The rupee has depreciated 6% against the dollar this year, weighing it down on broader strength in the greenback and withdrawal of investors from domestic stock markets.
Meanwhile, India’s trade gap touched a monthly record of $24.3 billion in May, hurt by higher commodity prices.
“When oil prices are so high, obviously the CAD (current account deficit) will go up. For the past several years, India has been reducing the CAD along with capital inflows. This year has had an adverse impact on capital flows,” The official, who did not want to be named, told reporters.
As of 1013 GMT, the partially convertible rupee was trading at 78.95/96 per dollar, hitting a new record low on Friday.
However, the official said India’s macroeconomic fundamentals remained strong and he was “quite confident” that India would come out “well” once the situation improves.
The official also said that the government will stick to the fiscal deficit target of 6.4% of GDP for the 2022-23 financial year beginning April 1.