Rupee fall may or may not help exports, says FM Nirmala Sitharaman

Finance minister Nirmala Sitharaman on Monday said though a depreciating rupee should theoretically help India’s exports, under currency slump in external demand, the fall in the local currency may or may not help the country’s exports.

“Some people do also speak that a falling rupee also helps exports. Whether it does or doesn’t, theoretically it may, but in today’s condition, with recession outside and demand not really as adequately as it should be, even a fall in the rupee may or may not help our exports. We are conscious about these basic facts,” Sitharaman said while answering a question at an event organised by CNN-News18.    

On rupee touching a fresh low, Sitharaman said because of the strength of India’s macro-economic fundamentals, rupee is holding out well and the rate of fall of other currencies vis-à-vis dollar has been sharper than rupee. “So is that a consolation? Partly yes because the strength of your economy speaks when you talk about your exchange rate,” she added.  

Sitharaman said the central bank has used nearly $75 billion to stop fluctuations and severe volatitlies in rupee-dollar exchange rate. “RBI is not aiming at fixing the exchange rate, the government doesn’t believe in it. The Indian rupee and its exchange rate is also left to the market to decide,” she said.