Minister of State for Finance cites ‘global factors’ for rupee depreciation


New Delhi: Union Minister of State for Finance Pankaj Choudhary said in a written reply to a question in Rajya Sabha on Tuesday that while the Indian Rupee has weakened against the US Dollar, it has strengthened against other major currencies such as the British Pound, Japanese Yen and Euro during 2022. .

The minister said global factors – Russia-Ukraine conflict, rising crude oil prices and tightening global financial conditions – are the main reasons for the weakening of the Indian rupee against the US dollar.

The minister further said that exchange rate is one of many different factors like demand for domestic and foreign goods, commodity prices, crude oil prices, etc., which affect the demand for India’s exports and imports. India’s merchandise exports touched a record high of US$ 421.9 billion during 2021-22. India’s exports during each month of the current year have been higher as compared to the corresponding month of the previous year.

The overall impact of exchange rate depreciation on domestic prices depends on the extent of pass-through of international commodity prices in the domestic market, the minister said.

Giving further details, he said that the Department of Commerce regularly monitors and sensitizes the concerned Ministries/Departments and other stakeholders on the following comprehensive strategy to address the issue from time to time and at various fora:

Addressing domestic supply tightness and looking at increasing opportunities/capacity of domestic production;
Timely use of trading remedial options;
the adoption of mandatory technical standards;
enforce the rules of origin;
Tariff Measures / Reverse Tariff Reforms etc.

He said that the commerce department is monitoring the import data on monthly and yearly basis to identify any visible changes and to monitor the increase in imports. All the concerned Ministries/Departments are apprised about the increase in imports at the level of 8 HS points on a monthly basis so that appropriate action can be initiated wherever necessary. A status sheet of the import structure is also circulated to all the concerned Ministries/Departments every year since 2014.

The minister further said that there is an import monitoring system to provide advance information on imports to the government and stakeholders for steel, non-ferrous metals, coal and chips (integrated circuits).

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