The Rupee continued to plummet on Wednesday to hit a fresh 6-month low at 65.71 against the dollar from the previous day’s 65.45. As the Rupee woes continue in India, NITI Aayog’s vice-chairman Rajiv Kumar says that the depreciating Rupee will boost exports which subsequently would mean more employment.
Government’s top economic policy advisor Rajiv Kumar has said in an interview to BloombergQuint that Rupee should be allowed to depreciate to a point where exports get revived. Giving reference to Prime Minister Narendra Modi’s insistence on domestic substitution to energy imports, Rajiv Kumar said, “I think if you got a depreciated rupee, which made your energy costs higher, you will get both lower consumption and less wastage, but also a nice kick towards producing your own domestic renewables and other sources that you can achieve. I am convinced in my mind. The encouragement to export means greater employment.”
For India to become a global market player, Rajiv Kumar said, it is important to assure Indian businessmen that the Rupee does not appreciate in future.
The Indian Rupee, which was on its appreciating spree for the last few months, was bound to depreciate as it had hit its saturation point, analysts believe. The plummeting in the rupee value comes after it had been trading in the 64-65 range in the last few months, and even hit a high of Rs 63.6 in early August. So far this year, the rupee has gained 4.2%, and even hit a fresh two-month high on August 3rd at Rs 63.6, after trading at 64-65 levels for a long time.
Jamal Mecklai, CEO, Mecklai Financial, in an interview with ET Now said, “For a long time, people were thinking: Oh my God! How much longer can the rupee stay so strong. I think it sort of reached a cracking point end of last week.”
The Indian rupee is reeling under pressure because of the increased buying in the safe-haven assets such as gold and yen and the continuous strengthening of the US dollar against a basket of currencies.