The currency slipped below 80 against the US dollar recently
The ongoing conflict between Russia and Ukraine, soaring crude oil prices and tighter global financial conditions are the main reasons for the weakening of the Indian rupee, which recently slipped below 80 against the dollar. American, the government told parliament on Tuesday.
In a written response to a question posed to the Rajya Sabha, Union Minister of State for Finance Pankaj Chaudhary said that “global factors such as the Russian-Ukrainian conflict, soaring crude oil prices and tighter global financial conditions are the main reasons for the weakening of the Indian Rupee against the US Dollar. »
He said the exchange rate is just one of many different factors such as demand for domestic and foreign goods, commodity prices, crude oil prices, etc., which affect export demand. and import from India. India’s merchandise exports hit a record high of $421.9 billion in 2021-22.
India’s exports in each month of the current year have exceeded those of the corresponding months of the previous year.
The Minister noted that while the Indian Rupee weakened against the US Dollar, it strengthened against other major currencies such as the British Pound, Japanese Yen and Euro in 2022.
The overall impact of exchange rate depreciation on domestic prices depends on the extent of pass-through from international commodity prices to the domestic market, Chaudhary said.
He also added that the Department of Commerce regularly monitors and sensitizes Ministries/Departments and other stakeholders from time to time and in various forums to address the challenges arising from the depreciation in the value of the currency.
Actions taken by the government include addressing domestic supply rigidities and examining domestic production opportunities/improving capacity; the timely use of corrective trade options; adoption of mandatory technical standards; enforce rules of origin; and tariff action/correction of reverse duties, etc.
In addition, the minister said, the Department of Commerce conducts import data monitoring on a monthly and annual basis to identify any visible changes and monitor import surges.
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