Nirmala Sitharaman attributes rupee fluctuations to global, domestic factors

📌 Summary:

• Union Finance Minister Nirmala Sitharaman said rupee–dollar fluctuations are driven by a mix of global and domestic factors
• Factors cited: geopolitical uncertainties, foreign capital movements, and India's dependence on imports of crude oil, fertilizer and gold
• She clarified that the Reserve Bank of India (RBI) intervenes in the forex market only to curb excessive volatility, not to maintain a fixed exchange rate
• Remarks made near Bengaluru at an event marking 12 years of the NDA government

🎯 UPSC Relevance: GS3 Economy — exchange-rate determination, RBI's managed-float policy, balance of payments and import-driven currency pressure.

📝 Prelims Facts:

• India follows a managed-float (not fixed) exchange-rate regime
• RBI uses forex reserves to smooth volatility, not to peg the rupee
• Key import pressures on the rupee: crude oil, fertilizer and gold

🔑 Key Term: Managed float — an exchange-rate system where the currency is market-determined but the central bank intervenes to limit sharp swings.