FX reserves enough to mitigate volatility, says Arun Jaitley

The Asian Age.

Business, Economy

However, he said India’s macro fundamentals remain resilient and strong.

Union minister Arun Jaitley (Photo: PTI)

New Delhi: A day after the rupee fell to record low, Union minister Arun Jaitley said  that India’s foreign exchange reserves are comfortable by global standards and sufficient to mitigate any undue volatility in the foreign exchange market.

“Recent developments relating to Turkey have generated global risk aversion towards emerging market currencies and the strengthening of the dollar,” tweeted Mr Jaitley.

However, he said India’s macro fundamentals remain resilient and strong. “The developments are being monitored closely to address any situation that may arise in the context of the unsettled international environment,” said Mr Jaitley.

The Indian currency on Tuesday crashed to a life-time low of 70.09 on concerns over Turkey’s economic woes that have impacted various emerging markets, even as the US dollar gained strength against other currencies.

RBI’s foreign exchange reserves were at $402.70 billion in the week ended August 3, down $1.49 billion over the preceding week, latest data showed.

Economic affairs secretary Subhash Chandra Garg had also said on Tuesday that there is nothing to worry about as long as the depreciation is in line with other currencies.

Mr Garg had also said that while the RBI had sufficient foreign exchange reserves, its intervention in the currency market may not be of much help as of now, as the weakness in the rupee was a result of global factors.