Chief Economic Advisor (CEA) V Anantha Nageswaran on Wednesday said that the depreciation of the rupee against the US dollar has been lower than other major global currencies such as the Euro, the British pound and the Japanese yen.
He attributed depreciation in rupee and other currencies against the US dollar to the aggressive monetary tightening by the US Federal Reserve.
As a result, outflow of foreign capital is taking place from various emerging economies including India, putting pressure on their domestic currencies. "Japanese yen, Euro, Swiss franc, British Pound have depreciated much more against dollar (than the rupee)," he said on the sidelines of an event.
Both the government and RBI have taken measures to check the outflow of dollars and encourage inflow of foreign funds so that the depreciation of the domestic currency can be contained, he said.
Earlier this month, the Reserve Bank of India (RBI) announced new liberalised rules to attract foreign inflows. Besides, the government has also raised import duty on gold imports.
The RBI raised the overseas borrowing limits for companies and liberalised norms for foreign investments in government bonds as it announced a slew of measures to boost foreign exchange inflows.
It has also increased interest rates in recent months, thus increasing the attractiveness of holding Indian rupees for residents and non-residents.
The rupee for the first time touched a low level of 80 against the US dollar in intra-day spot trading at the interbank foreign exchange market on Monday. The domestic currency has depreciated about 7.5 per cent against the greenback in 2022 so far.