As rupee continues to fall Cong faults Modi's policy, BJP defends

The Indian rupee's depreciation beyond ₹86 against the US dollar on Monday sparked a war of words between the ruling Bharatiya Janata Party and the opposition Congress party over the currency's economic performance during their respective terms.

The Congress leader Jairam Ramesh took a dig at Prime Minister Narendra Modi on social media platform X over the currency's depreciation, questioning Modi's commitment to strengthening the currency.

The head of BJP's IT cell, Amit Malviya, in turn, said despite the depreciation, the rupee remains one of the most stable currencies globally, bolstered by improved external conditions, reduced current account deficits, and strong foreign exchange reserves, with its depreciation over the past year outperforming other major currencies.

"Over the past year, even as the US Dollar Index surged by 9.8%, the rupee depreciated by a modest 3.68%, outperforming major currencies like the Japanese Yen and Korean Won, which fell by 9-12% during the same period," he said in a post on X.

Steepest fall ever

The rupee logged its steepest fall in nearly two years, plunging 55 paise to hit a historic low of 86.59 against the US dollar during the mid-session due to the strengthening of the American currency and surging crude oil prices.

At the interbank foreign exchange, the rupee opened at 86.12 and fell to the lowest-ever level of 86.59 against the dollar during the mid-session, registering a loss of 55 paise from its previous close. The rupee, however, pared some losses and was later trading 46 paise down at 86.50 versus the dollar.

The fall of 55 paise, or 0.65%, in one session was the steepest since 6 February 2023, when the rupee lost 68 paise.

Since December, the rupee has dropped more than 2%, driven by concerns over India's slowing economic growth and speculation that the RBI may reduce interest rates as early as February.

Rupee's `resilience'

Malviya said the rupee's resilience in 2021, declining just 0.7% over four months following the US Federal Reserve's tapering announcement, starkly contrasts the 14.9% plunge in 2013, highlighting India's improved economic stability.

Despite the strong dollar and global currency pressures, the rupee has outperformed many currencies, even strengthening against the euro and Canadian dollar, he said.

"Despite ongoing geopolitical tensions and high US interest rates, India has avoided any currency crisis. This resilience is a testament to prudent economic management and robust fundamentals," Malviya said in the post. 

(By arrangement with livemint.com)