India's Commerce Minister: Government Doesn't Control Exchange Rates

New Delhi: Commerce and Industry Minister Piyush Goyal on Saturday said the government does not interfere in exchange rates as these are determined by market forces and influenced by several global factors.

However, he said, the government is always conscious of taking steps to promote exports, reduce import dependence and promote a greater degree of investment into India.

"The government does not interfere in the exchange rate. It is a matter of market forces, and it is also dependent on several global factors. In fact, if I read correctly, in the last two or three days, again the rupee has appreciated pretty significantly. So, these are market-driven factors," he told reporters here when asked about his views on rupee outlook.

The rupee rose for the second consecutive session on Friday (May 22) to close sharply higher at 95.60 against the US dollar on softening of crude oil prices and supposed intervention by the Reserve Bank.

The rupee's sharp decline has emerged as one of the biggest economic warning signs for policymakers, investors and businesses.

Once considered among Asia's more stable currencies, the rupee has now become one of the worst-performing emerging market currencies this year, pressured by a toxic mix of expensive oil, capital outflows, widening trade deficits and a surging US dollar.

Goyal added that steps such as finalisation of nine free trade agreements in recent years, encouragement for import substitution of goods where India has a critical requirement in its supply chains, promoting ease of doing business, and decriminalisation of minor offences will certainly support India's industrialisation.