Russia-Ukraine Conflict, Soaring Crude Oil Prices Among Major Reasons For Weakening Of Rupee Against Dollar: Govt

The Central government on Tuesday (26 July) said that several global factors including the ongoing Russia-Ukraine conflict, increasing crude oil prices are among the major reasons behind weakening of the Rupee against dollar.

In a written reply to a question in the Rajya Sabha, Union Minister of State for Finance Pankaj Chaudhary said that while the Indian Rupee has weakened against the US Dollar, it has strengthened against other major currencies such as the British pound, the Japanese yen and the Euro during 2022.

The minister stated that global factors such as the Russia-Ukraine conflict, soaring crude oil prices and tightening of global financial conditions are the major reasons for the weakening of the Indian Rupee against the US Dollar.

He further stated that exchange rate is only one of the several different factors such as, demand for domestic and foreign goods, commodity prices, crude oil prices etc., which affect India’s export and import demand.

The overall impact of exchange rate depreciation on domestic prices depends on the extent of pass-through of international commodity prices to the domestic market, the minister stated.