Not losing sleep over it: CEA Nageswaran on rupee hitting record low

Chief Economic Advisor V Anantha Nageswaran expressed hope that the currency will recover next year

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Chief Economic Advisor V Anantha Nageswaran on Wednesday said he expects the Indian rupee to improve against the dollar next year. His comment came as the rupee hit a record low, crossing the 90-mark against the US dollar in opening trade. 

 

"It will come back next year. Right now, it's not hurting our exports or inflation. I am not losing my sleep over it. If it has to depreciate, now probably is the right time," Nageswaran said on the sidelines of a Confederation of Indian Industry (CII) event in New Delhi, reported PTI. 

 

At 9 am today, the INR traded at 90.06 against 1 USD, down 9 paise.

Why is rupee plummeting?

The depreciation of rupee comes amid foreign institutional investor (FII) outflows and sustained buying of dollars by banks. According to Reuters, the rupee has fallen 5.3 per cent year-to-date, putting it on track for its steepest annual decline since 2022, and making it the worst-performing Asian currency.

 

A decline in the domestic equity markets and the absence of an India-US trade deal put further pressure on the local unit, according to news agency PTI. The US imposed a 50 per cent tariff on India starting August 27. While the two nations are engaging in bilateral talks, a trade agreement hasn't been reached yet.

Decline comes amid strong growth, low inflation

Rupee's dramatic decline comes even as the country reported better-than-expected gross domestic product (GDP) growth for the last two consecutive quarters.  India's GDP grew 8.2 per cent in the July-September quarter (Q2) of FY26, following a 7.8 per cent rise in the June quarter.

 

Meanwhile, India's inflation has stayed below the Reserve Bank of India's targets. The retail inflation cooled to 0.25 per cent in October due to record-low food prices and the impact of the Goods and Services Tax (GST) cuts, which eased prices across several sectors.