The Indian rupee is currently at its lowest level. The rupee on Wednesday breached the 90-mark, hitting an all-time low against the dollar. The biggest reason for this fall in the rupee against the dollar is the higher demand for the dollar against the rupee in the market. Apart from this, continued selling by foreign investors, geopolitical uncertainty and stalled trade deal negotiations can also be considered reasons for the rupee’s decline. Union Finance Minister Nirmala Sitharaman has now commented on this fall in the rupee. He believes that the Indian currency will find its own way amid India’s strong growth outlook.
The rupee must find its own path
Speaking at the 23rd edition of the Leadership Summit (HTLS), the Finance Minister said, “The rupee will have to find its own path.” The Finance Minister stressed that the debate on currency levels should take into account current economic realities and not be compared with past situations. “Look at the fundamentals of the economy, look at the growth. The debate on currency should be dictated by current realities and not by direct comparison with past situations,” the Finance Minister said.
Assess the strength of the economy: Finance Minister
The Finance Minister further said, “As far as the rupee-dollar exchange rate is concerned, when the value of the currency falls, the natural logic is that exporters should benefit from it. Incidentally, some people say that during the US tariffs, it provided some relief. Even if that is true, I am not entirely satisfied with that explanation – but it is true that the strength of the economy must be assessed along with it.”
It is noteworthy that on December 4, the Indian rupee fell to an all-time low of 90.46 against the US dollar due to the delay in the India-US trade agreement and continued outflow of foreign capital from the Indian stock market. What is surprising is the domestic currency’s weakening against the dollar, despite retail inflation at a record low and GDP growth above 8 per cent.
How much will the economy grow?
In the second quarter, GDP growth reached its highest level in six quarters at 8.2 percent. On the other hand, India’s retail inflation fell to a record low of 0.25 percent in October. The Finance Minister believes that the Indian economy will continue to grow in the times to come and the overall growth this year (FY26) could be 7 percent or even more.