This article was last updated on April 16, 2022
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Addressing the Parliament on Friday, Prime Minister Manmohan Sigh made an attempt to explain the depreciation of Indian rupee. Singh agreed that the matter is a major cause of concern but he also reiterated that Indian rupee has overshot its true value, which is expected to reverse. Indian rupee has recently hit its lowest value of 66.56 to the dollar in over two decades.
“Forex markets have the notorious history of overshooting… unfortunately this is happening not only to the rupee but other currencies too,” PM Singh explained.
According to Singh, the current situation was predictable and the sharp depreciation in the value of Indian rupee is part of a needed adjustment due to the country’s large current account deficit. Adding to that note, the premier explained that the current account deficit is unsustainably large.
In addition, the global factors including Syria crisis have also played a critical role in the alarming decline of rupee. PM Singh listed a number of measures that the government has undertaken to revive the value of Indian currency.
“We must ensure that the fundamentals of our economy remain on track,” he said.
As the Indian rupee hits a record low and new figures prove that growth in Asia’s third largest economy is slowing down substantially, the ruling party is set to tremble right before the upcoming elections. Despite his detailed speech aiming to control the chaotic reaction to the depreciating currency, the opposition accused the government for creating uncontrollable inflation and economic instability in India.
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