The country is on a "safe wicket" as far as the rupee is concerned and the currency will be "stable" in the long-term, finance minister Piyush Goyal said here today.
"In the long-term, the rupee will be stable; we are at safe wicket as far as the rupee is considered," Goyal told a session at the AIIB's annual meetings.
He further said after the taper tantrum of the 2013 summer, which saw the rupee depreciate to 68.85 against the dollar, forcing the Reserve Bank to raise USD 32 billion through FCNR(B) deposits which helped the currency appreciate to the 62-63 levels.
The Reserve Bank has paid back the USD 32 billion mopped up through the overseas deposits and the rupee is now back to the pre-taper tantrum levels, the minister said.
It can be noted that the rupee had depreciated to a lifetime high of 68.85 in August 2013 which had forced the RBI to launch the overseas deposits programme.
The widening current account deficit--one of the major reasons for the currency getting battered in the last episode of depreciation--in the recent past has led many quarters to express concerns over the currency in the recent past as well.
However, many experts point out that the country has sufficient forex reserves now (over USD 410 billion as per the latest RBI data) and investor flows to fund the deficit.
Meanwhile, Goyal also said the country has been able to save USD 6.5 billion in power costs by making an investment of USD 1 billion in the LED bulbs. The high volume purchase of the bulbs has also helped the world as the price have gone down, he added.
Despite the pep-talk by the finance minister during the market hours, the rupee plunged 29 paise to close at 68.13 to the greenback today, which dealers attributed primarily to to the month-end dollar demand from importers and banks.
The currency remained under pressure over fears of an escalating trade conflict between the US and China after Donald Trump's threatened to review Chinese investments in American tech companies.
