New Delhi: Chief Economic Advisor V. Anantha Nageswaran has allayed fears over any major adverse fallout for the economy due to the depreciation of the rupee. "The falling rupee is not affecting inflation or exports," he told journalists on the sidelines of a CII event.
In answer to a question, after the rupee sank to a record low to briefly fall below the 90 mark vis-a-vis the US dollar, Nageswaran quipped: "The government is not losing sleep over the weakening of Indian currency."
However, he also said that the rupee should improve next year.
The rupee has depreciated about 5 per cent against the US dollar in 2025 in the wake of global economic uncertainties triggered by the US tariff hike on India’s exports. The RBI has been intervening to prop the rupee against excessive volatility by selling US dollars in the market, but this cannot be done beyond a point due to the forex constraints.
The rupee's decline was driven by weak foreign flows, large offshore positioning, and uncertainty around a US-India trade deal.
Analysts said that the market mood remained tense as traders watched for signs of stability in the rupee and clarity on trade negotiations between India and the United States.
"The rupee depreciation will halt and even reverse when the India-US trade deal materialises. This is likely this month. A lot, however, will depend on the details of the tariffs to be imposed on India as part of the deal," an analyst stated.
