The Indian rupee has strengthened against major currencies such as the Euro, British pound and Japanese yen though it has weakened against the U.S. dollar, Minister of State for Finance Pankaj Chaudhary said on Tuesday.
“Global factors such as the Russia-Ukraine conflict, soaring crude oil prices and tightening of global financial conditions are the major reasons for the weakening of the Indian Rupee against the U.S. dollar.”
“Currencies such as the British pound, the Japanese yen and the Euro have weakened more than the Indian rupee against the U.S. dollar and therefore, the Indian rupee has strengthened against these currencies in 2022,” he said in a written reply in the Rajya Sabha.
The Reserve Bank of India regularly monitors the foreign exchange market and intervenes in situations of excess volatility, he added.
The RBI has raised interest rates in recent months, thus increasing the attractiveness of holding Indian rupees for residents and non-residents.
Earlier this month, the RBI also 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.
The RBI increased the external commercial borrowing limit under the automatic route from $750 million or its equivalent per financial year to $1.5 billion, and eased norms for foreign portfolio investments in the debt market.
He further said the nominal exchange rate is only one of the factors that impact an economy.
The depreciation of a currency is likely to enhance the export competitiveness, which in turn impacts the economy positively, he said, adding the depreciation also impacts the imports by making them more costly.
The department of commerce regularly monitors and sensitises line ministries, departments and other stakeholders from time to time on matters such as addressing domestic supply rigidities and looking at domestic production opportunities/enhancement of capacity and timely use of trade remedial options.
In reply to another question, the minister said the value of notes in circulation as on November 4, 2016 was Rs 17,74,187 crore.
The value of notes in circulation increased to Rs 31,73,681 crore as on July 1, 2022.
As per the RBI, he said, the total number of counterfeit currency notes in circulation/detected in the banking system for the 2021-22 stands at 2,30,971 pieces. More than 90% of the counterfeit notes were of low quality and none of the major security features were compromised.
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