In 5-year perspective, rupee has largely been stable against most currencies: Economic Adviser

File photo. Photograph:( ANI )

WION Web Team Delhi, India Sep 14, 2018, 11.15 PM (IST)

Principal Economic Adviser in the Ministry of Finance, Sanjeev Sanyal, on Friday stated that although the rupee has tumbled recently, in a broader perspective, it has largely been stable against most currencies in the past five years with an exception to the US dollar.

"The rupee has depreciated very significantly since the beginning of the year. But if you take a 5-year perspective you'll see the rupee has by and large been stable against most currencies with one exception of the dollar," Sanyal noted.  

Sanyal further added that the Reserve Bank of India "has quite correctly preserved ammunition in terms of foreign exchange reserve." 

"It has $400 billion worth of it quite enough to defend rupee if necessary and so it continues to have that ammunition that the powders dry and should the necessity be to defend rupee it'll be done," Sanyal stated. 

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Meanwhile, Union Finance Minister Arun Jaitley outlined measures to stem the decline in tumbling rupee on Friday.  

The government will ease overseas borrowing norms for the manufacturing sector, the finance minister said after an economic review meeting chaired by Prime Minister Narendra Modi late on Friday, as the government announced a slew of measures to stem a sharp fall in the rupee, news agency Reuters reported. 

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Jaitley said manufacturing entities will be permitted to avail external commercial borrowings (ECBs) of up to $50 million with a minimum maturity of one year, down from three years earlier.

He said India will also relax rules to raise masala bonds or rupee-denominated overseas bonds, for banks and will take measures to cut down "non-necessary" imports.

According to reports, Jaitley also said that the government will boost exports to check the widening CAD.

"In the meeting, the RBI governor gave a detailed presentation on the condition of world's economy and external factors which can affect Indian economy," Jaitley stated. 

(With inputs from agencies

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Sanyal further added that the Reserve Bank of India 'has quite correctly preserved ammunition in terms of foreign exchange reserve.'