Question : PLUNGING OF RUPEE AGAINST US DOLLAR



(a) the month-wise value of the Indian rupee against the US Dollar in 2010 and 2011 till date;

(b) the reasons for steep rise and fall in the rupee value in comparison to US Dollar;

(c) whether any assessment has been made by the Government in the matter under various parameters including the additional expenses likely to be incurred as a result thereof; and

(d) if so, the details thereof?

Answer given by the minister


MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI NAMO NARAIN MEENA)

(a) The monthly exchange rate (average of buying and selling by Foreign Exchange Dealer Association of India (FEDAI)) of rupee per US dollar during 2010 and 2011 is given below:

Month	Rs. per US$
2010 January, 2010 45.96 February, 2010 46.33 March 2010 45.50 April, 2010 44.50 May, 2010 45.79 June, 2010 46.54 July, 2010 46.84 August, 2010 46.57 September, 2010 46.06 October, 2010 44.46 November, 2010 45.02 December, 2010 45.16 2011
January, 2011 45.39 February, 2011 45.44 March ,2011 44.97 April, 2011 44.37 May, 2011 44.90 June, 2011 44.83 July, 2011 44.42 August, 2011 45.25 September, 2011 47.63 October, 2011 49.26 November, 2011 50.30 (upto November 22)

(b) The fluctuation in rupee exchange rate has been due to changing supply- demand balance in the domestic foreign exchange market. The main reason for depreciation of rupee against US dollar is uncertain global economic environment, particularly unfolding of euro zone sovereign debt crisis.

(c)&(d) Though in the long run, the Rupee fall would benefit exporters through higher export earnings and improved competitiveness vis-à-vis other emerging economies, the decline in the value of Rupee would have detrimental effect in the short run. The Rupee decline makes oil imports more expensive, contributing to inflationary pressures. The Rupee cost of other imports would also rise, thereby contributing to price rise.