The rupee hit a record low last Thursday to cross 69 to a dollar | Dhiraj Singh/Bloomberg
Representational image | Bloomberg
Text Size:

RBI has been selling dollars to redeem the rupee’s value, but this has led to a drop in foreign exchange reserves by $26 billion.

New Delhi: India expressed concern about the rupee’s decline for the first time and said it’s considering a plan to tap its citizens overseas, according to a government official.

The local currency, Asia’s worst performing major so far this year, which plunged as much as 1.3 per cent to a record low Monday, pared losses after the comments. The relief may be temporary given concerns about a widening current account and trade gap on the back of elevated prices of oil, India’s biggest import item.

The finance ministry and the Reserve Bank of India are in touch and the central bank is intervening in the currency market when needed, the government official told reporters in New Delhi on Monday, asking not to be identified citing rules. The RBI has been selling dollars, albeit in a restrained manner, leading to a drop in India’s foreign exchange reserves to $400 billion from a record high of $426 billion in mid-April.

The official said India’s reserves position was comfortable and authorities could take measures such as tapping overseas Indians and other moves to plug the current account gap. In 2013, the central bank lured inflows of about $34 billion through discounted foreign-currency swaps, helping lift the rupee from a record low.

Data on Friday showed, India’s current account deficit widened to a five-year high, with little respite in store amid a yawning trade gap. The trade data for August due out later this week are likely to show that imports, especially costly crude, outpaced exports.

The gap for last month is likely to come in at $17.45 billion, according to a Bloomberg survey, compared with $18 billion in July and much worse than the average $15 billion in the April-June quarter amid higher oil prices. The crude import bill for the world’s fastest-growing oil user surged 76 percent in July from a year earlier, highlighting the rupee’s vulnerability. – Bloomberg

Subscribe to our channels on YouTube & Telegram

Why news media is in crisis & How you can fix it

India needs free, fair, non-hyphenated and questioning journalism even more as it faces multiple crises.

But the news media is in a crisis of its own. There have been brutal layoffs and pay-cuts. The best of journalism is shrinking, yielding to crude prime-time spectacle.

ThePrint has the finest young reporters, columnists and editors working for it. Sustaining journalism of this quality needs smart and thinking people like you to pay for it. Whether you live in India or overseas, you can do it here.

Support Our Journalism

1 Comment Share Your Views

1 COMMENT

  1. Prof PK Sharma,Freelance Journalist,Barnala (Punjab)

    This shows the seriousness of India ‘s Polity towards pressing problems and difficulties staring the nation in the face.

    We are facing the music for want of vision, foresight and planning before time !

    Our honorable Prime Minister Modi’s first love is campaigning liberally and comprehensively for BJP in any Assembly Polls and Lok Sabha Polls any where in the country ! In case, BJP opts to expand its mass base internationally in polls there too then PM Modi’s
    involvement, responsibility and dependence on him will increase manifold !

    Then his second love is touring foreign nations to “enhance India’s prestige and glory internationally ” The foreign policy may touch its lowest ebb, the relations with neighbours may not show any worthwhile improvement but India’s stature on paper or rhetorically may display upward trend !

    How economy, foreign policy and defence of nation could be fool proof when the captain of the team did not strive and intend to
    do justice to various areas of the game objectively and sincerely . For instance, Mr. Arun Jaitley to begin with was loaded with two vital
    portfolios of Finance and Defence ! Consequently, neither economy nor defence of the nation picked up resulting in breaches here and there !

    The defence and finance portfolios saw Mr. Jaitley awfully stressed and strained that ultimately he was constrained to go on medical leave in wake of his deteriorating health !

    India had three defence ministers in almost more than four years – Mr. Jaitley on regular intervals, Mr. Manohar Parrikar and Ms.Nirmala Sitharaman !

    Leaving the defence of the nation in air, Mr. Manohar Parrikar was rushed and packed to Goa to grab power for BJP there.

    How casually and subjectively, nation’s governance had been left to chance by the Captain of BJP team ?

    Amazingly, for powerful BJP duo of NaMo- Amit Shah all is well, no challenge from any opposition, party or any quarter ! Rest of the
    partymen are busy pleased to cheer up the Captain and the Vice-Captain of BJP blindly !

    Anyhow, what is the harm of “living in fools’ paradise” and ” day dreaming ” by the BJP flock that BJP in wake of its unprecedented performance is well poised to reign supreme for next fifty years ?

    The masses are well prepared to take them to task, they must not forget at all !

    Prof PK Sharma, Freelance Journalist
    Pom Anm Nest,Barnala(Punjab)

LEAVE A REPLY

Please enter your comment!
Please enter your name here