St Petersburg, Sept. 6 (PTI): India today said it had “adequate” foreign exchange reserves — $280 billion at present — to defend its currency amid global volatility and ruled out any external assistance unless there was a “radical” change in the situation.
Planning Commission deputy chairman Montek Singh Ahluwalia said the rupee’s fall this year had clearly overshot limits.
“With $280 billion in reserves, I don’t think we will be drawing on currency swap arrangements unless there is a radical change in the situation,” Ahluwalia said at the ongoing summit of the Group of 20 (G20) industrialised and emerging economies.
He reiterated that to some extent the depreciation of the rupee, which had nearly touched 69 last month, was justifiable.
“But when it was close to Rs 69 there was clear overshooting and the extent of the rupee was not all connected with high market volatility,” he said, adding that economists have estimated the rupee’s value at anything between 59 and 65 against the dollar.
“Some depreciation was justifiable. But when it was 69 there was clear overshooting that was not desirable,” he said.
He said currency markets had “over-reacted” over fears of an imminent phasing out of fiscal stimulus by the US.
On a contingency reserve arrangement being worked out by Brics to help members draw funds from a common $100-billion facility, he said it was not yet clear what were the terms on which one could draw.