Our Bureau
New Delhi
Chief Economic Adviser V Anantha Nageswaran stated on Wednesday that the government is “not losing sleep” over the Indian rupee’s plunge to a record low of 90.30 against the US dollar, as the depreciation neither impacts inflation nor exports. Speaking on the sidelines of a Confederation of Indian Industry (CII) event, he expressed optimism that the currency would “come back” next year. The rupee has weakened about 5% against the dollar in 2025, marking its worst annual decline since 2022.
The local unit fell 34 paise from its previous close amid heavy foreign institutional investor (FII) outflows, sustained dollar buying by banks, and a dip in domestic equity markets. Forex traders attribute further pressure to the absence of an India-US trade deal, with US tariffs on Indian exports adding to uncertainties; experts warn of potential slides to 90.5 or even 92 levels without resolution. Reduced RBI interventions compared to last year—$36.3 billion sold from August to November versus $55.8 billion earlier—have also contributed.
Despite the volatility, Nageswaran noted the timing may be opportune, coinciding with robust GDP growth of 8.2% in Q2 FY26 and low inflation. The RBI’s bi-monthly Monetary Policy Committee meeting, underway since Wednesday, will announce decisions on December 5, with markets eyeing possible currency stabilization measures. Analysts anticipate a foreign direct investment surge beyond $100 billion this year to bolster reserves.
