Iraq crisis led to rupee depreciation: Govt

The recent Iraq crisis has led to marginal depreciation of the rupee and government is calibrating "appropriate policy responses" to cope with the situation, Parliament was informed today.

"Since the escalation of the Iraq crisis in the second week of June 2014, the exchange rate of the rupee (RBI reference rate) has depreciated marginally from Rs 59.33 on June 11, 2014 to Rs 60.14 per US dollar on July 1, 2014," Minister of State for Finance Nirmala Sitharaman said in a written reply in the Rajya Sabha. She added that the hardening of international oil prices and market expectations on the same could be the main reason that led to the depreciation of the rupee. 

Sitharaman said the Indian basket of international crude oil prices increased from USD 107.24 per barrel on June 11 to USD 112.45 per barrel on June 19, 2014. "It has however moderated subsequently and was USD 109.20 per barrel as on July 1,2014. The government closely monitors the emerging global economic situation and calibrates appropriate policy responses to cope with it," she said. The government hiked petrol and diesel prices by Rs 1.69 per litre and 50 paise a litre respectively on June 30 as the Iraq crisis led to increase in international oil and currency markets.

Following the price hike, petrol in Delhi now costs Rs 73.58 per litre, up Rs 2.02 from Rs 71.56 earlier.