Finance Ministry Bases Import Duty Calculation On Dollar Value Of Rs 79.90

As opposed to Rs 78.95 two weeks ago, the Finance Ministry set the exchange rate for the dollar on Thursday at Rs 79.90 with effect from July 8. The steep revision is the result of rupee devaluation versus the dollar following capital outflows brought on by many external causes, notably the globalization of interest rates.

Similarly, the value of the pound sterling has been set at Rs 96.10 as opposed to Rs 96.70 earlier, according to  finance ministry report.

The dramatic swing in currency rates coincides with the rupee's 4.1% decline versus the US dollar so far in the current fiscal year (up to July 5). In contrast to other EMEs and even significant advanced economies, it is minor.

The RBI has used up its foreign exchange reserves since the conflict in Ukraine started in late February in an effort to protect the rupee from a sharp fall. The total foreign exchange reserves have decreased by USD 40.94 billion since February 25.