Speculation rife on Rupee devaluation

​Hyderabad: Speculation was rife on Thursday amid reports that the Union Finance Ministry is likely to propose the devaluation of the Rupee pretty soon. The Commerce and Finance Ministries are likely to discuss a possible devaluation of the Rupee at a meeting next week, CNBC-TV18 reported on Thursday quoting a Finance Ministry official, who requested anonymity, as saying.

However, with the Finance and Commerce Ministries denying any such move to change its policy on the currency, maintaining that “the Rupee’s value is driven by the market,” the Rupee pared losses from a two-week low.

The Indian Rupee fell 0.2 per cent to close at 67.0250 against the US Dollar, the weakest level since August 1, 2016, following the media speculation, after rising as high as 66.82 earlier in the session. Clearing the air on the reports that her Department had called for the devaluation of the Rupee, Union Commerce Minister Nirmala Sitharaman tweeted: “I had no conversation on devaluation of any currency with any news correspondent. Any quotes/ mentions referring to me on this topic (are) baseless.”

With the Indian currency falling abruptly, Union Economic Affairs Secretary Shaktikanta Das, too, said that the Rupee was not an administered rate. “The value of the Rupee is determined by the market and there is no plan to change the policy.

The market reports that government wants to devalue rupee is false,” he said. According to dealers, the Reserve Bank of India (RBI) came to the rescue and prevented the Indian currency from suffering further. The RBI entered the market and sold dollars at 67.07 levels, they said, wishing not to be named.

By: K Rajani Kanth