Lok Sabha Question No. 2478 (UNSTARRED), answered on 2016-03-11
Subject: Value of Rupee
Ministry: FINANCE
Asked by: VEENA DEVI, JAYSHREEBEN  PATEL

- (a) the value of Indian rupee against pound, dollar and euro during each of the last 12 Months and reasons for difference/ variation, currency-wise;
- (b) the type of fluctuation experienced thereof; and
- (c) the strategy formulated by the Government to maintain purchasing value of rupee?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI JAYANT SINHA)

(a) & (b) The month-wise average exchange rate of the rupee vis-à-vis US dollar, pound and euro since March 2015 is given the table given below. The RBI reference rate for the  rupee  against  the  US  dollar  is  the  exchange  rate  calculated  on  each  trading  day basis by the RBI. The exchange rates of the rupee vis-à-vis euro and pound are derived rates based on the rupee-US dollar reference rate and the middle rates of the pound/US dollar  and  the  euro/US  dollar  cross  currency  quotes. While  on  a  point  to  point  basis, large  movements  in  exchange  rate  of  the  rupee  vis-à-vis  US  dollar  and  other  two currencies  are  observed  between  two  reference  points,  on  a  longer  time  basis  the changes in average exchange rate has been relatively less. The depreciation of Indian rupee against US dollar in 2015-16 largely reflects the general appreciation of the US dollar  globally  and  the  supply-demand  imbalance  in  the  foreign  exchange  market.  In 2015-16 (April-February), the rupee has performed better than many major currencies of the world. During this period, euro and pound depreciated by 13.8 per cent and 6.9 per cent respectively against US dollar while Indian rupee depreciated by 6.6 per cent. Some of the important factors for the changes in exchange rate in the above period are: negative  sentiments  in  domestic  equities  due  to  global  sell  off  and  some  domestic concerns;  the  outlook  of  the  US  economy  and  the  policy  stance  of  the  US  Federal Reserve;  the  global  crude  oil  price  outlook  as  emanating  from  the  news  on  the  Iran nuclear deal; the depreciation of the Chinese currency and outlook on China's growth rate and financial market developments.

Table: Exchange Rate of the Rupee against the US  dollar, pound and euro (Monthly Average Rate)

| Month   |   Rs. per US dollar |   Rs. per pound |   Rs. per euro |
|---------|---------------------|-----------------|----------------|
| Mar-15  |               62.45 |           93.53 |          67.63 |
| Apr-15  |               62.75 |           93.91 |          67.79 |
| May-15  |               63.8  |           98.82 |          71.21 |
| Jun-15  |               63.86 |           99.36 |          71.59 |
| Jul-15  |               63.64 |           99.08 |          70.03 |

| Aug-15   |   65.07 |   101.49 |   72.51 |
|----------|---------|----------|---------|
| Sep-15   |   66.22 |   101.6  |   74.39 |
| Oct-15   |   65.06 |    99.76 |   73.06 |
| Nov-15   |   66.12 |   100.62 |   71.09 |
| Dec-15   |   66.6  |    99.94 |   72.46 |
| Jan-16   |   67.25 |    97.11 |   73.08 |
| Feb-16   |   68.24 |    97.66 |   75.77 |

Source: RBI

- (c)  The  exchange  rate  of  the  rupee  is  by  and  large  market  determined.  The Government and the RBI are closely monitoring the emerging external position including exchange  rate  of  the  rupee  in  nominal  and  real  terms  and  on  an  on-going  basis calibrating policies or regulations to support robust macroeconomic outcome.

*****