New Delhi [India], July 26 (ANI): The ongoing Russia-Ukraine conflict, soaring crude oil prices, and tightening of global financial conditions are major reasons for the weakening of the Indian rupee, which slipped below 80 against the US dollar recently, the government said in Parliament on Tuesday.
In a written reply to a question in the Rajya Sabha, Union Minister of State for Finance Pankaj Chaudhary said, "global factors such as the Russia-Ukraine conflict, soaring crude oil prices and tightening of global financial conditions are the major reasons for the weakening of the Indian Rupee against the US Dollar."
He said that the exchange rate is only one of several different factors such as demand for domestic and foreign goods, commodity prices, crude oil prices, etc, which affect India's export and import demand. India's merchandise exports touched a record high of USD 421.9 billion during 2021-22.
India's exports during each month of the current year have been higher than those of the corresponding months of the previous year.
The minister noted that while the Indian Rupee has weakened against the US Dollar, it has strengthened against other major currencies such as the British pound, the Japanese yen and the Euro during 2022.
The overall impact of exchange rate depreciation on domestic prices depends on the extent of pass-through of international commodity prices to the domestic market, the minister said.
Giving more details, the minister stated that the Department of Commerce regularly monitors and sensitises line Ministries/Departments and other stakeholders from time to time and in various forums to address the challenges arising out of the depreciation in the value of currency.
Measures taken by the government include addressing domestic supply rigidities and looking at domestic production opportunities/enhancement of capacity; timely use of trade remedial options; adoption of mandatory technical standards; enforcing rules of origin; and tariff measures/inverted duty correction etc.
Besides, the Minster stated, the Department of Commerce has been carrying out import data monitoring on a monthly and annual basis to identify any visible changes and to monitor surges in imports.
All concerned Ministries/Departments are apprised of item-wise imports surge at 8 HS digit level on a monthly basis such that appropriate action may be initiated where necessary. A Position paper on the structure of Imports is also circulated to all concerned Ministries/Departments annually since 2014, the minister added.
Further, the minister stated that there is an Importing Monitoring System for providing advance information on imports to the government and stakeholders for steel, non-ferrous metal, coal and chips (integrated circuits). (ANI)