‘Not losing sleep’s over rupee’s fall: CEA Nageswaran

“It (rupee) will come back next year. Right now, it is not impacting inflation or exports,” Nageswaran added.

After flirting with the 90-per-dollar mark on Tuesday, the rupee finally crossed it on Wednesday as it continues to hit fresh record lows. So far this calendar year, the rupee has fallen by over 5 per cent against the US dollar and is the worst-performing currency in Asia.

Factors behind rupee’s fall

Several factors have driven the rupee lower this year, with the primary reason being the continued delay in the conclusion of a free trade agreement with the US. Since late August, Indian goods have faced a cumulative tariff of 50 per cent while entering the world’s largest economy, which has dented exports. As per latest data, India’s exports were down 12 per cent year-on-year in October as the merchandise trade deficit ballooned to an all-time high of $41.7 billion.

At the same time, the Reserve Bank of India (RBI) has seemingly loosened its grip over the rupee, intervening to a lesser extent to stem the decline. After selling almost $400 billion of foreign currency on a gross basis in FY25 to shore up the exchange rate, the central bank sold only $44 billion in the first half of FY26. Meanwhile, foreign investors have been exiting domestic stock markets, with outflows so far in 2025 totaling close to $17 billion. This comes on the back of $21 billion of inflows in 2023 which then slumped to a mere $124 million in 2024.

Nageswaran’s comments come after the Finance Ministry said in its Monthly Economic Review report last week that the fall in the rupee has been gradual and is in line with emerging market trends.

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