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Rupee Depreciation Against U.S. Dollar Lower Than Yen, Euro: CEA V Anantha Nageswaran

India’s rupee has fared better against the U.S. dollar as compared to other global currencies, Chief Economic Adviser V Anantha Nageswaran said.

He attributed the depreciation to an aggressive U.S. Federal Reserve. That’s caused a flight of capital from emerging economies, including India.

“Japanese Yen, Euro, Swiss Franc, British Pound have depreciated much more against the dollar (than the rupee),” Nageswaran said on sidelines of an event in New Delhi on Wednesday.

The Reserve Bank of India and the government have taken measures to check the outflow of dollars and encourage inflow of foreign funds so that the depreciation of the domestic currency can be contained, he said.

RBI had earlier in July announced new liberalised rules to attract foreign inflows. Besides, the government has also raised import duty on gold.

The central bank has raised overseas borrowing limits for companies and liberalised norms for foreign investments in government bonds in an attempt to boost foreign exchange inflows. The monetary policy committee has also increased the repo rate in recent months, thus increasing the attractiveness of holding Indian rupees.

On Tuesday, the rupee weakened past 80 per U.S. dollar for the first time. It has depreciated about 7.5% against the greenback so far this year.

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