Rupee stable despite global pressures, says FM

Metro India News | NEW DELHI

Finance Minister Nirmala Sitharaman on Monday said that India’s economic fundamentals remain robust and the rupee is performing “absolutely fine” against the US dollar, even as global uncertainties continue to weigh on currencies worldwide.

Replying to questions in the Lok Sabha on the recent depreciation of the rupee, Sitharaman underlined that the Indian currency’s movement should be viewed in the context of global developments, particularly the ongoing West Asia conflict that began on February 28, 2026. Since then, the rupee has weakened by about 4.1 per cent, settling at Rs 94.82 per US dollar on March 27.

She stressed that this decline is not unique to India, as several emerging market currencies have also come under pressure due to external factors such as geopolitical tensions and a stronger US dollar. In comparison, the South Korean won has depreciated by 4.6 per cent, the Thai baht by 5.5 per cent, and the Philippine peso by 4.8 per cent during the same period, indicating a broader trend across Asian economies.

Highlighting India’s macroeconomic strength, Sitharaman said the country continues to enjoy strong fiscal management, stable economic growth, and solid foreign exchange reserves. She added that India’s fiscal deficit management has earned global appreciation, reinforcing confidence among investors and helping cushion the impact of external shocks on the rupee.

Minister of State for Finance Pankaj Chaudhary also addressed the issue, stating that the rupee’s value is market-determined and influenced by a range of domestic and global factors. These include capital flows, crude oil prices, interest rate movements, and overall demand for the US dollar. He assured Parliament that both the government and the Reserve Bank of India are closely monitoring the situation and are prepared to act if necessary.

Chaudhary further highlighted the improvement in inflation as a key positive indicator for the economy. He noted that average retail inflation has declined from 6.2 per cent in 2020-21 to 4.6 per cent in 2024-25, and further to 1.9 per cent during April-February of the current fiscal year. Prices of essential commodities have largely remained stable or have shown a declining trend, offering relief to consumers.

Despite ongoing global pressures, the rupee has depreciated by 9.9 per cent against the US dollar in the current financial year so far. However, the government maintains that India’s economic resilience and policy stability continue to support the currency, keeping it relatively stable compared to other emerging market peers.