As ₹ slumps, Nirmala Sitharaman says it's the dollar that's strengthening

Union Finance Minister Nirmala Sitharaman believes that the rupee’s value is not sliding, but the US dollar is strengthening.

“First of all, I will look at it, not [as] the rupee sliding and look at it as the dollar strengthening incessantly,” Sitharaman said during a press conference in Washington DC on Saturday. “So, obviously, all other currencies are performing against the strengthening of the dollar,” she added.

Sitharaman is on a six-day official visit to the US. Her remarks came six days after the rupee touched a record low of 82.69 against the dollar. The rupee breached the 82-per-dollar mark on October 7.

Market experts blame the rupee’s depreciation to rising crude prices and the aggressive rate hikes by the United States Federal Reserve to control inflation.

Also read: Inflation, slow business push service sector PMI to six-month low

“RBI keeping tabs”

However, Sitharaman believes the rupee’s performance has been better than that of other currencies. “I am not talking about technicalities but it is a matter of fact India’s rupee probably has withstood this dollar rate going up,” she said. “I think the Indian rupee has performed much better than many other emerging market currencies.”

She added that the RBI was keeping close tabs on the matter. “The efforts of RBI are more towards seeing that there is not too much volatility, it is not to intervene in the market to fix the value of the rupee,” Sitharaman said. “Containing the volatility is the only exercise RBI is involved in, and I have said this before that the rupee will find its own level.”

“Inflation manageable”

Talking about inflation, Sitharaman claimed that the country was in a “comfortable situation.” She said, “I keep repeating, inflation is at a manageable level too. We are making efforts to bring it further down.”

Also read: IMF praises RBI for tightening the monetary policy to curb inflation

Retail inflation in India has remained above the upper limit mandated by the RBI for nine months now. The RBI aims to contain inflation within 2% to 6%. In September, India’s retail inflation rose to 7.41% from 7% in August.

“ED is independent”

During the press conference, the finance minister also rubbished allegations that the central government was using the Enforcement Directorate (ED) for political or vindictive purposes.

“The ED is completely independent in what it does, and it is an agency which follows on predicate offences,” PTI quoted Sitharaman as saying. “The first offence is already picked up by any other agency, whether it is the Central Bureau of Investigation or any other agency, and it is (after) that the ED comes into the picture.”

Also read: ‘Can’t blame external factors for inflation,’ Chidambaram tells govt not to give excuses

Several Opposition parties have alleged that the Narendra Modi-led government was using the central agencies to target its political opponents.

On digital achievements

Talking about India’s digital achievements receiving accolades from the International Monetary Fund, Sitharaman said many G20 members had suggested that India should showcase its digital successes such as Aadhaar.

“Even during my meeting with the World Bank president today, he said that we should showcase how common people have accepted the deepening of digital applications in India. (He) also said he will be happy to work together with India to take it to other parts of the world,” she added.

(With agency inputs)