Rupee’s Fall Is Because Of Stronger Dollar, Stable Over Past Five Years: Sanjeev Sanyal

The Principal Economic Advisor to the government Sanjeev Sanyal has said that the rupee’s fall vis-a-vis the dollar is “not a concern” as it has been stable with respect to other currencies in the past five years, The Hindu has reported. The rupee has been hovering at an exchange rate of 69-70 per dollar during past few days.

“If you take any broad-based basket, you will see that the rupee is not especially weak. We cannot get too swayed by a single bilateral exchange rate”, he told The Hindu. The data of rupee’s fall in comparison to other emerging market currencies shows that rupee has been performing better than other currencies.

The “fall” in rupee’s value in dollar terms is due to the latter’s strength and not the former’s weakness, he added. Further, he said that the Reserve Bank of India (RBI) had enough reserves to manage the situation.

In spite of the assurance of the Principal Economic Advisor, the situation looks grim as far as oil imports are concerned. With falling rupee value, the import bill is expected to go up to $114 billion for the year, $26 billion higher than last year.

The impact of falling rupee on petrol and diesel prices will be seen in the coming weeks. Rising oil import bill impact India’s trade deficit adversely. The gap between imports and exports had risen to $18 billion in July. Rising fuel prices may also result in higher overall inflation in the Indian economy.