New Delhi: Finance Minister Arun Jaitley on Wednesday said there was no need to worry over the steep fall in the Indian rupee's value against the US dollar as the inherent strength of the country's economy will aid in arresting the downtrend.
According to Jaitley, the recent trend in the Indian rupee's devaluation has been caused due to external factors such as fluctuations in the global crude oil prices, trade war tensions and outflows of funds towards the US.
"No need for the world's fastest growing economy to come out with panic and knee jerk reaction...," Jaitley said at a media briefing after the meeting of the Union Cabinet.
The rupee's unabated fall continued for the sixth day on Wednesday as it hit yet another closing low of 71.75 against the US dollar, forcing the RBI to intervene to prevent a full-blown meltdown.
It has fallen over 11 per cent from the start of the year, making it the worst performing currency in Asia. But Jaitley disagreed with the doom and gloom scenario portrayed in various reports, saying that the dollar has strengthened against all currencies and not just the rupee.
“The rupee has either consistently strengthened or remained in a range, not weakened. Most of the other currencies of the world, compared to what it was 4-5 yrs ago, rupee is better off,” he said.
He cited the example of the pound, saying that when the NDA came to power one pound was worth 102 rupees against the current value of around 80. However, the biggest reason for the sharp decline in the pound has been Brexit, leading to its fall in value against all currencies.
The minister further said the government has consistently maintained 4 per cent inflation during the last four years. Elaborating his point on global factors affecting the rupee, he said India is a net buyer of crude oil and spike in prices affects the country.
"That's an external factor. We are not in a trade war business but when countries neighbouring us devalue their currencies, that has a corresponding impact on us. Turkey had some impact on us," he said.
The minister further said eventually the inherent strength of the Indian economy has to play a very important role and expressed confidence that fluctuation in the currency market will come down. "I am sure that the currency management in these areas are done by the Reserve Bank of India and they are certainly doing whatever is necessary for this purpose," he added.
He also mounted a defence of Narendra Modi government’s deal with France for Rafale fighter jets, saying not even a screw will be added to the aircrafts in the country and hence, there was no question of a private player benefiting from it.
Addressing a press conference after a two-and-half hour long cabinet meeting, Jaitley said India would buy the 36 aircrafts directly from France in a fly-away and the whole transaction does not involve any private company.
He was referring to allegations by the Congress and its president Rahul Gandhi that the deal signed by the UPA government in 2007 was changed by the NDA in collusion with Anil Ambani and India was paying a much higher price for each jet. “Ignorance is contagious in dynastic parties,” he said on being asked about the allegations.
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