The Indian rupee may have weakened against the dollar in nominal terms, but at real effective exchange rates, it appreciated by 5.5 per cent in 2014-15 and 3 per cent in 2015-16, the government informed Parliament today.
The average annual exchange rate fell by over 6 per cent to 65.5 per dollar in 2015-16 as against the previous year as the greenback remained stronger than most currencies globally, Finance Minister Arun Jaitley said in a written reply in the Rajya Sabha today.
“During 2015-16, the average annual exchange rate of the rupee was 65.5 per US dollar as against an average level of 61.1 in 2014-15. The depreciation in 2015-16 to the tune of 6.6 per cent largely reflects the general appreciation of the dollar globally against most currencies,” Jaitley said.
He was replying to a question on the reasons for failure of the rupee to remain stable against the dollar.
In 2015-16, the rupee performed better than many major currencies of the world.
During this period, euro and pound depreciated by 12.5 per cent and 6.7 per cent, respectively, against US dollar.
Though the rupee depreciated against the dollar in terms of nominal effective exchange rate, which is a weighted geometric average, the rupee has appreciated against a basket of currencies, he said.
“This means that Indian rupee has become stronger against a basket of currencies. In terms of real effective exchange rates… the rupee appreciated by 5.5 per cent in 2014-15 and 3 per cent in 2015-16,” Jaitley explained.
The government and RBI are closely monitoring emerging external positions, including exchange rate of the rupee in nominal and real terms, on an ongoing basis and are calibrating policies or regulations to support robust macro-economic outcome, Jaitley added.