Rupee remains one of the best performers in 2024: Finance Ministry

The government said on Tuesday the rupee remains one of the best performing currencies in 2024, with a much lower depreciation against the dollar than the currencies of Japan and South Korea.

In a written reply in the Rajya Sabha, minister of state for finance Pankaj Chaudhary said the rupee weakened by just 0.6% against the greenback until July 24 this year, while the Japanese yen and the South Korean won dropped 8.4% and 6.7%, respectively.


“Despite the global headwinds, the relative stability of the rupee bears testimony to India’s sound and resilient economic fundamentals, macroeconomic and financial stability,” the minister said.

The Dollar index, meanwhile, strengthened nearly 3% while all the G10 currencies, barring the British Pound, weakened more than 1% against the greenback during this period, Chaudhary said.

Brent crude prices, too, rose more than 6% until July 24 this year, accentuating pressure on the rupee, he added.

“The depreciation of currency is likely to enhance the export competitiveness which, in turn, impacts the economy positively,” Chaudhary said. However, the depreciation can potentially raise the prices of imported goods. “However, the overall impact of exchange rate depreciation on domestic prices depends on the extent of pass-through of international commodity prices to the domestic market,” Chaudhary said.

Furthermore, the imports in the economy also depend on various factors, including the demand and supply of commodities in the international market, kind of tradeable goods (such as essential or luxury items), freight costs, availability of substitutes goods, etc, he added. “Thus, the impact of movement of the exchange rate on the importers cannot be isolated,” he said.