Govt monitoring exchange rate situation: Meghwal

The government is monitoring the exchange rate situation and will take appropriate steps to bring stability to the forex market in case of excessive volatility, Parliament was informed today.
The result of the US Presidential election and improving prospects of the US economy have impacted the international financial markets, Minister of State for Finance Arjun Ram Meghwal said in a written reply to the Lok Sabha.
With improvement in US bond yields, he said, there have been bouts of volatility in the financial markets of emerging market economies (EMEs) due to capital outflows, leading to sharp depreciation in their currencies and fall in equities.

"The government continues to monitor the evolving situation on the exchange rate front and stands ready to take appropriate steps to bring stability to the forex market in case of excessive volatility in the forex market," he added.
The Indian rupee, which stood at 66.62 to a dollar on November 8, was trading at 67.81 in trade today.
Meghwal said the strengthening of US dollar from late October intensified after the US election results and triggered a sizeable depreciation of currencies around the world, including euro, yen and most of the EME currencies including the Indian rupee.

Republican nominee Donald Trump won the US presidential election last month, defeating Democrat candidate Hillary Clinton.

"However, the performance of the Indian rupee has been relatively better vis-a-vis most of the EME currencies... The net foreign portfolio outflows from Indian equities and debt markets, which began in October 2016, has now stabilised," Meghwal said.
The fundamentals of Indian economy continue to be strong though there could be some volatility in the short term, he added.