The rupee has appreciated by 3.2 per cent during April-October in real terms, even as several major currencies have depreciated, said Reserve Bank of India (RBI) Governor Shaktikanta Das in his monetary policy address on Wednesday.
Das said, “The appreciation of the US dollar this year, which precipitated large-scale depreciation of all major global currencies including the Indian rupee, has drawn wide attention…Through this episode of US dollar appreciation, the rupee’s movements have been the least disruptive, relative to peers. In fact, the rupee has appreciated against all other major currencies except a few.”
He added that the rupee should be allowed to find its level and that is what we have been striving to ensure.
Governor Das also said that size of forex reserves is comfortable and has increased. “We had announced a series of measures in July to enhance forex inflow. As a result, new External Commercial Borrowing (ECB) agreements have been concluded for $8.6 billion,” Das said.
Forex reserve rose $2.89 billion to $550.14 billion during the week that ended November 25, according to the Weekly Statistical Supplement released by the Reserve Bank of India (RBI).
On December 6, the rupee ended at 82.62 against the dollar against Monday's close of 81.79. It opened at 82.66 on December 7 and appreciated to 82.44 during the MPC speech.
In his speech, the RBI governor said that the story of the rupee has been “one of India’s resilience and stability.”
On Wednesday, RBI announced a 35 basis point hike in the repo rate to 6.25 per cent. RBI also lowered India’s economic growth projection to 6.8 per cent from an earlier estimate of 7 per cent for the current fiscal.
The central bank also estimated the inflation to remain at 6.7 per cent during FY23 with Q3 at 6.6 per cent and Q4 at 5.9 per cent. Das said that global inflation remains high and broad-based in the aftermath of the Russia-Ukraine war while adding that the Indian economy remains resilient; India is seen as a bright spot in a gloomy world.