Our Central Reserve Bank has taken some steps to arrest the depreciating Indian rupee. The rupee’s devaluation was prevented by an oversupply by the Reserve Bank of India by selling large amounts of its dollar reserves. A few months ago the dollar reserves with the RBI stood at $625 billion. After selling about $50 billion of that, the stock is now down to about $575 billion.
At the same time, to curb imports of gold, the import duty on gold was raised from 7.5 percent to 12.5 percent.
These two measures have partially prevented the depreciation of the Indian rupee, but have not been able to fully recover from the depreciation or increase the value significantly.
As of today, the value of the rupee against the US dollar is around 80. Our expectation is that this should change to 70, 78 in the future and not 81, 82. Let’s see if our expectations are fulfilled.
– Vikatan Student Journalist Naveen Kumar.Pho