Rupee stable at 92-93
Prime Minister’s Economic Advisory Council (EAC-PM) Chairman S Mahendra Dev on Wednesday said the Indian rupee is expected to stabilize at 92-93 levels against the US dollar and expressed hope that foreign investment inflows will improve in the near future as geopolitical tensions ease and macroeconomic fundamentals remain strong.
Dev said the currency faced pressure due to global uncertainties including the recent conflict between the United States and Iran and the withdrawal of foreign institutional investors (FIIs).
His comments come after a temporary ceasefire between the US and Iran has helped calm global markets, reducing fears of supply disruption in the oil market and reducing volatility in currencies including the rupee.
“The rupee is stabilizing at 92-93. There was pressure due to global war-related headwinds and FII withdrawals. But despite these headwinds, the rupee will remain stable at these levels. One should not worry,” Dev said on the sidelines of the India Chamber of Commerce interactive session.
The rupee had recently crossed the level of more than 95 against the US dollar.
The EAC-PM Chairman said India’s economic resilience and strong macroeconomic fundamentals provide the ability to absorb external shocks.
“The resilience of the Indian economy is strong. Our macro fundamentals are good and we have the fiscal space to absorb shocks. Many countries do not have that advantage,” he said.
“We can continue capital expenditure and social expenditure, which many countries cannot do. Our fiscal management is also good,” he said.
He also highlighted structural factors such as improving debt-to-GDP ratio, ongoing economic recovery and technological progress, which will encourage private sector investment and support higher growth.
Dev said the current account deficit can go up to 2 per cent of GDP and our current level is around 1.3 per cent, so it is not a matter of great concern.
The current account deficit could widen to around 2 per cent from the current level of 1.3 per cent, he said, and “so we have headroom”.
He described the decision of the Monetary Policy Committee (MPC) of the Reserve Bank of India to keep the policy rates unchanged as appropriate in the current economic environment.
On growth prospects, Dev said he is optimistic that India will achieve growth of 6.9 per cent and even 7 per cent in 2026-27 despite global uncertainties.
While the RBI has projected growth at 6.9 per cent, the EAC-PM chairman said he was “more positive” about the outlook.
“I am more positive. I was saying we can even achieve 7 per cent growth,” he said, citing recent economic performance as evidence of continued momentum as India moves towards its goal of becoming a developed nation by 2047.
