Rupee-Dollar Update: During the US tour, Finance Minister Nirmala Sitharaman made a statement regarding the continuous fall in the rupee against the dollar, after which a controversy has arisen over her statement. The Finance Minister said that the Indian currency rupee has not weakened, but the dollar has strengthened. The Finance Minister has now come under the target of the opposition for this statement.
Nirmala said that the rupee has not weakened!
Nirmala Sitharaman, who visited the US to attend the annual meeting of the IMF World Bank, said that the Indian currency rupee (INR) has performed better than the currency of many emerging economies of the world. Nirmala Sitharaman said that the rupee is not weakening, we should see it in such a way that the dollar is getting stronger. Along with this, the Finance Minister also said that the Indian Rupee is doing much better than the rest of the world’s currency.
Many experts agree with the Finance Minister!
After this statement of the Finance Minister, the opposition is criticizing him. It is also being pulled up on social media. However, many economists are agreeing with the statement of the Finance Minister. Former SBI Chief Economist Vrinda Jagirdar said that what the Finance Minister said is 100 percent true. Rupee has not weakened as much as other countries’ currencies have weakened. Rather, the dollar has strengthened against the currency of all the countries of the world. He said that the dollar has strengthened for two reasons. The first reason is that the US Federal Reserve is continuously raising interest rates. Investment from emerging countries is going back to America. Second, the inflation rate in America and other countries is much higher than in India.
Dollar strengthens due to Fed decisions
The US Central Bank, the Federal Reserve, is continuously raising interest rates after inflation reached a 40-year high. After that the dollar is getting stronger. The dollar is trading at the highest levels since 2000 against the euro. The dollar has strengthened more than 14 percent against the euro. So it has gained 21 percent against Japan’s yen. The biggest fall came in the Turkish currency Lira, which has fallen more than 28 percent against the dollar. While the rupee has weakened only 10 per cent.
This currency is strong against the dollar
There are some currencies that have strengthened against the dollar. Mexico’s currency peso has strengthened by 2.05 percent against the US dollar in 2022, while Brazil’s currency real has strengthened by 7.05 percent against the dollar.
Rupee stronger against currency of other countries
Anuj Gupta, Vice President, Research, IIFL Securities also agreed with the Finance Minister’s statement. He said that the Indian currency has weakened only against the dollar. While the currencies of other countries have fallen more against the dollar. At the same time, the Indian currency has strengthened against the currency of other countries, which includes the pound, yen and euro. Anuj Gupta said that we do not only do business with America but also do big business with European countries and our traders have got the benefit of strengthening rupee against the currency of these countries.
Dollar dominance increased the difficulty
Gita Gopinath, former chief economist of the IMF and current economist Pierre-Olivier Gourinchas, wrote in the blog that the recent strengthening of the dollar due to the dominance of the dollar in international trade and finance could have a large-scale macroeconomic impact on many countries. However, India also has concerns about the weakness in the rupee. Imports are getting expensive. This can have an impact on the economy and demand. At present, the rupee is at 82.39 against a dollar, but many experts are predicting a fall to the level of 85.
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