New Delhi: It is not the exchange rate of the rupee but 'other factors' that are impacting the country's exports, the government said on Friday.
"In India as the exchange rate of the rupee has remained bi-directional in a general depreciating trend and there are other factors affecting exports, there has been no direct relationship between the overall level of exports and the level of the rupee," Minister of State for Finance Nirmala Sitharaman said in a written reply to the Lok Sabha.
While the rupee has remained stable or appreciated in the recent months relative to levels in the period August 2013 to February 2014, it has depreciated vis-a-vis the average annual exchange rates of 2011-12 and 2012-13, she said.
The rupee had touched its lifetime low of 68.85 against a US dollar in August last year, but has strengthened since then. In yesterday's trade the rupee gained 27 paise to close at 61.22 against the American, logging best single-day gain in over a month.
"Theoretically, a sustained appreciation of the rupee can make exports costlier and import cheaper, other things remaining the same," Sitharaman said.
She said the government and the Reserve Bank do not seek to target a specific level of exchange rate.
"In India, the exchange rate policy is guided by the broad principles of careful monitoring and management of exchange rates with flexibility, while allowing the underlying demand and supply conditions to determine the exchange rate movements over a period in an orderly manner," she added.
