Rupee Support
India FX reserve enough to cushion rupee against depreciation, says govt official
This story was originally published at 13:46 IST on 14 January 2025
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NEW DELHI – India has enough foreign exchange reserves to provide a cushion against the depreciation in the rupee, a top government official said on the condition of anonymity. The rupee fell past the 86-per-dollar mark on Monday and declined 0.7% to end at 86.58 a dollar.
The Indian currency has been under strong pressure in the last few months due to a globally strengthening dollar. As the Reserve Bank of India continues to defend the rupee, its foreign exchange reserves have depleted over $70 billion from the record high hit in September, to a 10-month low of $634.59 billion in the week ended Jan. 3.
The official said that the fall in the rupee is set to benefit India's exporters, particularly service exporters. India's total exports were $778.34 billion in 2023-24 (Apr-Mar), which included service exports worth $341.27 billion. However, a weak rupee may not bode well for the economy as India is a net-import nation with $678.21 billion of inward shipments in FY24.
India's high imports bill stems from huge crude oil imports. There are apprehensions of a surge in crude oil prices following the fresh sanctions imposed by the US on Russia on Friday. But the official said that India would not face any major impact due to the sanctions.
Outgoing US President Joe Biden's administration slapped sanctions on more than 200 entities and individuals, including major Russian oil producers Gazprom Neft and Surgutneftegas, Russian insurance companies, and shadow fleet vessels. End
US$1 = INR 86.59
Reported by Krity Ambey
Edited by Akul Nishant Akhoury
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