‘Not concerned about the rupee at all’: Sanjeev Sanyal says weakening of INR in itself doesn’t mean much

Sanjeev Sanyal, Economic Advisory Council to the Prime Minister (EAC-PM), said that the fall of the rupee should not be conflated with the state of the economy. He said often economies witnessing high growth do see an exchange rate weakness. Sanyal’s remarks came after the rupee breached the 91-a-dollar mark for the first time on Tuesday.

Speaking at the 'Times Network's India Economic Conclave 2025', Sanyal said, "I am not concerned about the rupee at all... Let me say that the rupee and its current weakness should not be necessarily conflated with some economic worry, because historically, if you go over time, you will see that economies that are in their high growth phase very often go through a phase of exchange rate weakness.”

He gave the example of other economies to elucidate his point: "So you go back to, for example, when the Japanese economy was growing very, very fast, their exchange rate was kept quite weak. The Chinese had that in the 90s and 2000s till they began to allow the yuan to strengthen.”

Sanyal said the weakening of the rupee in itself does not mean anything as long as it is not generating domestic inflation.

Earlier, just as the rupee had crossed the 90-per-dollar mark, Chief Economic Adviser to the Government, V Anantha Nageswaran, also stated that the government is not "losing sleep" about the fall of the currency. He said that the currency's decline has not significantly impacted inflation or export competitiveness, and that it should improve in the coming year.

Meanwhile, the rupee traded in a narrow range against the US dollar in early trade on Thursday, with the positive effect of fresh foreign fund inflows counterbalanced by concerns over trade deal uncertainty and risk-off sentiment. Opening at 90.35 at the interbank foreign exchange market, the rupee strengthened to 90.32 before briefly touching 90.38 against the dollar. On Wednesday, the rupee had recovered 55 paise from its record low to close at 90.38 against the greenback.

Sanyal also spoke about the trade deals, and said that New Delhi is pursuing the trade negotiations very aggressively with the European Union and the US. "But let me also be very clear here that as we pursue these, we will have to make decisions where some trade-offs have to be made, but we will work to make sure that they are done to our best national interest," he said.

Speaking about India’s ties with the US, Sanyal stated that New Delhi has not escalated anything with Washington but at the same time, it has not bent down.