New Delhi: India is trying to “address volatility” in the rupee, which has fallen to record levels against the dollar in recent weeks, a government official said on Monday, amid concerns of a widening trade deficit and foreign investors. Amidst concerns about selling the property by.
The rupee has depreciated 6% against the dollar this year, weighing it down on broader strength in the greenback and withdrawal of investors from domestic stock markets.
Meanwhile, India’s trade gap touched a monthly record of $24.3 billion in May, hurt by higher commodity prices.
“When oil prices are so high, obviously the CAD (current account deficit) will increase. For the past several years, India has been reducing CAD along with capital inflows. This year has had an adverse impact on capital flows,” the official said. who did not wish to be named, told reporters.
As of 1013 GMT, the partially convertible rupee was trading at 78.95/96 per dollar, hitting a new record low on Friday.
The official, however, said the macroeconomic fundamentals remain strong and he is confident that India will come out well once the situation improves.
The official also said that the government will stick to the fiscal deficit target of 6.4% of GDP for the 2022-23 financial year beginning April 1.
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