As India’s currency trades close to its weakest level against the US dollar, Finance Minister Nirmala Sitharaman expressed confidence that the rupee will regain balance, supported by the country’s strong economic performance.
Speaking at the 23rd Hindustan Times Leadership Summit (HTLS), the minister said, “The rupee will have to find its own way,” highlighting that any discussion on currency movements should reflect the economy’s current fundamentals rather than past comparisons.
She emphasized that India’s economic stability, robust growth, and improving macro indicators must shape the narrative around exchange rates.
“Look at the fundamentals. Look at the growth. The currency debate must be based on today’s realities, not judged in a simple past-versus-present manner,” Sitharaman noted.
Addressing the rupee–dollar dynamics, she added that while a weaker rupee is often seen as an advantage for exporters, the explanation is not entirely adequate, especially when placed alongside the broader economic picture.
Some argue that with the US imposing higher trade tariffs, the weaker currency may offer limited relief—but the minister maintained that this alone cannot justify the decline.
On December 4, the rupee touched a historic low of ₹90.46 per US dollar, driven largely by delays in the India–US trade agreement and consistent foreign portfolio outflows from Indian markets.
What makes the situation unusual is that the currency is softening even as inflation has hit a record low and GDP growth has surpassed 8%.
India’s GDP grew 8.2% in Q2FY26, the highest in six quarters, while retail inflation fell to 0.25% in October, its lowest reading on record.
Sitharaman said the strong growth momentum witnessed during the second quarter is likely to continue and that India may achieve 7% or higher GDP growth for FY26.
When asked about the government’s major recent policy moves—the income tax cuts and GST rate rationalization—the minister said their impact will become clearer over time.
She explained that income tax collections can be accurately assessed only next year, although increased consumer spending is already visible. GST adjustments, being economy-wide, should be evaluated over a medium-term horizon.
