Economy Minister Ajay Seth on Tuesday dismissed concerns about the depletion of the forex reserve as “exaggerated” and said India has quite a large reserve to bridge the current situation.
Foreign exchange reserves fell for the seventh consecutive week, falling to $545.65 billion on Sept. 16.
Reserves, which have fallen as the central bank bets the pot to defend the currency amid pressures from global developments, fell $2.23 billion to $550.87 billion in the past week.
“There has been a depletion as inflows have decreased and the trade deficit is wider… I don’t see this as a problem; India has quite large reserves to bridge this situation,” Mr Seth said.
After hitting a record low at 81.67 against the dollar on Monday, the rupee recovered on Tuesday, closing at 81.58 against the greenback.
Finance Minister Nirmala Sitharaman had said on Monday: “Thanks to the strength of our microeconomic foundations, the rupee is holding up well. The rupee is holding up well.”
Speaking to DailyExpertNews-News18’s Townhall, she had said that the Indian currency is much better than many other currencies, which have fallen much pathetically against the dollar.
“What is our strategy now? The interventions, if not at all, the RBI is using the Indian reserves, which I think (USD) 75 billion has been used, mainly to stop fluctuations, the severe volatilities. The RBI is not intended to fix the rate, the exchange rate and the government doesn’t believe in it,” she had said.
The RBI’s intervention is to avoid the fluctuations, she had said. India’s forex reserve reached a record high of $642.453 billion on September 3, 2021.
Currencies worldwide were hit after the US Federal Reserve raised lending rates by 75 basis points to a range of 3-3.25% last week.
The economy minister said the government intends to stick to the budget deficit target of 6.4 percent for the current fiscal year ending March 2023.
“So we don’t plan to, I’ll say the path will be followed; no need to overshoot, we’re good at that aspect,” Seth said.
The government had set a gross market loan target of Rs 14.31 lakh crore in the budget for the current fiscal year. Of this, an estimated Rs 8.45 lakh crore will be borrowed in the first half, or the April-September period.