Amid the historical fall in the Rupee, the Chief Economic Advisor of India, V Anantha Nageswaran, said the weakening rupee against the dollar is not hurting inflation or exports.
“Not losing sleep over falling Rupee, it is not hurting inflation or exports”, the Chief Economic Advisor of the country said on the sidelines of a CII event. He highlighted that the Rupee is expected to improve against the dollar next year.
The rupee breached the 90/$ mark on Wednesday morning, extending its depreciation run in the past few days. It plummeted to a new low of 90.30 against the greenback in the intra-day session on Wednesday, falling 34 paise from its previous close, amid FII outflows and sustained buying of dollars by banks.
Why is the Rupee falling?
One key reason behind the rupee’s fall is a sharp slowdown in capital inflows and reduced intervention by the Reserve Bank of India. Earlier last year, between October 2024 and January 2025, the central bank sold a net $55.8 billion through spot and forward markets. However, this year the central bank’s intervention accelerated only from August 2025, as it offloaded $36.3 billion from August to November.
The high tariffs on Indian exports to the United States and the delayed trade deal between the two countries are another key reason for the Rupee depreciation. While India has reduced its purchases of Russian oil recently, India and the US are yet to reach an agreement on a trade deal that could lower the tariffs.
What next?
The RBI’s bi-monthly MPC meeting has started today, the central bank will announce the monetary policy decisions of December 5. The analysts are looking forward to the RBI’s decision on whether the bank would intervene to stabilise the currency.
