Rupee At 100? Neelkanth Mishra Warns Panic Can Be More Dangerous Than Depreciation

Can the Indian rupee crossing the ₹100-per-dollar mark become a serious economic problem, or is it merely a psychological barrier? In this insightful conversation on the ANI Podcast with Smita Prakash, Neelkanth Mishra, Chief Economist at Axis Bank, explains why the real concern is not a specific exchange-rate level but the volatility and panic that can accompany sharp currency movements.

Mishra argues that while a round number such as ₹100 per US dollar carries emotional significance, what truly matters is the impact of excessive volatility on investor confidence and India's long-term cost of capital. According to him, large swings in the currency can discourage investment, delay capital inflows and increase the risk premium attached to India as a destination for global investors.

He also highlights how fears of further depreciation can trigger a self-reinforcing cycle, with importers, businesses and investors rushing to hedge their exposure, creating even greater demand for dollars. Describing the phenomenon as a "stampede" rather than organised speculation, Mishra explains how panic among market participants can amplify pressure on the currency.

Watch the full discussion to understand the psychology of currency markets, the role of the Reserve Bank of India, and why managing volatility may be more important than defending any particular rupee-dollar level.