The Finance Ministry today said the devaluation of Chinese currency will only have a temporary impact on the rupee as India has adequate foreign exchange reserves.
“What is happening in China has introduced some amount of volatility. Because our macroeconomic situation is better this should be seen as a temporary adjustment because our fundamentals are strong,” Chief Economic Adviser Arvind Subramanian said, adding “we have adequate (forex) reserves”.
The Indian currency had yesterday hit its weakest level against the US dollar since September 2013, as China further devalued yuan.
However, rupee today snapped its seven-day losing streak and closed 10 paise higher at 65 on fresh selling of greenback by banks and exporters on hopes of resumption of foreign capital inflows into equity markets.
India had foreign exchange reserves of USD 353.347 billion in the week to August 7, marginally down over the previous week.
The reserves had touched a life-time high of USD 355.46 billion in the fortnight ended June 19.
Marking its biggest single-day rise in nearly seven months, the benchmark BSE Sensex today surged 518 points to reclaim the 28,000-level.