Finance Minister Calls for Market-Driven Approach as Rupee Hits ₹90

Finance Minister Nirmala Sitharaman addressed the recent decline of the Indian rupee, which reached a notable ₹90 against the US dollar, during the Hindustan Times Leadership Summit. She emphasized the importance of allowing the currency to remain market-driven, asserting that it must “find its own level” rather than be excessively managed by the government.

Sitharaman’s comments come as the rupee’s depreciation has sparked criticism from various quarters. During her speech, she remarked that exchange rates are “too sensitive” and should not be dictated by political influences. The Finance Minister urged observers to understand currency fluctuations within the context of India’s current economic fundamentals, which she believes are stronger than those of previous years.

“Today, the fundamentals of the economy are sorted,” she stated, pushing back against political comparisons with earlier times when her party was in opposition. Sitharaman insisted that the prevailing economic conditions warrant a reevaluation of how the rupee’s value is perceived.

While the rupee’s weakness has raised concerns, she noted that it can provide certain advantages for exporters. “When the rupee value comes down, I’m sure our exporters have started to capitalize on this,” she said, highlighting that a weaker currency can offer “some respite” during periods when tariffs negatively affect Indian products.

Sitharaman also addressed worries regarding the decline in household savings, clarifying that the data reflects changing savings patterns rather than an overall reduction. She asserted that “savings are growing, and so is investment today,” pointing out that while deposits in public banks or post office schemes might appear lower, total household assets continue to rise, driven by credit expansion.

The Finance Minister emphasized that the shift in savings to financial markets, digital instruments, and new investment products should not narrow the discussion on savings to traditional avenues alone. “We shouldn’t narrow the debate on savings to what’s going into public banks or post offices,” she added.

Despite the rupee’s drop to ₹90 against the dollar, Sitharaman maintained that India’s macroeconomic story remains robust. She reiterated that the currency’s movement should be understood within the broader context of the economy’s overall strength, encouraging a more holistic view of financial health rather than focusing solely on exchange rates.

The Minister’s remarks reflect a determined stance from the Indian government to foster a resilient economy that can withstand currency fluctuations while encouraging investment and growth. As the landscape evolves, the emphasis on market-driven mechanisms may play a crucial role in shaping India’s financial future.