The Minister of Commerce and Industry, Piyush Goyal, admitted Tuesday that the damping of the rupee was detrimental to the economy, but declared that the currency of India had performed better than most peers on the market emerging. Stressing the global economic challenges, including strong American growth and high interest rates, Goyal noted that, although many currencies have experienced strong decreases, the damping of the rupee was relatively modest.
“Damping is a bad thing. We think that in the long term, we have to focus on a stronger currency because we are still a country dependent on importation, “said Goyal by speaking at the India round table table today. Almost half the rate of competing savings.
“The damping of the roupie does not necessarily help the Indian economy, which is why I am happy that our depreciation is much less than that of competing economies,” said the minister. It has attributed recent depreciation pressures to global factors, including solid economic growth indicators in the United States and constantly high American interest rates. “Around the world, due to the strong numbers of American growth and their accent put on the construction of their growth history much faster, there has been a capital flight to America. In addition, the rates of ‘interest in the United States continues to be very high.
However, Goyal stressed that India’s monetary performance should be compared not only to the US dollar but also to other emerging markets. “Indian rupe is one of the most efficient currencies among emerging market savings. Our depreciation is about half in terms of percentage – we are around 2.8 to 3% against 5.5 to 6% indicated.
Goyal has also stressed that the damping of the rupee has slowed considerably in recent years. “If you are studying the depreciation of the Roupie until 2014 compared to since 2014, you will see a pleasant story. From 1947 to 2014, the Roupie depreciated at around 5.5% per year. From 2014 to now, it is around 2.5%, “he noted.
The Indian puzzle has been faced with increased volatility in recent weeks, marked by a sharp decrease of 57 points to 86.62 / USD on January 28, 2025 – its most steep daily fall in almost two years. This drop, followed by a hollow of 87.29 / USD on February 3, comes from global trade tensions, in particular the new American prices on China, Canada and Mexico, which have triggered a feeling of risk.
Foreign portfolio investors (FPI) withdrew 11 billion dollars from Indian shares during the quarter of the year 25, while debt outlets increased while the yield gap of 10 years has reached a hollow two decades. The Reserve Bank of India (RBI) has reduced its Forex interventions, allowing the Roupie to move more freely, while Forex reserves have dropped $ 70 billion since September 2024. INR.
