Raghuram Rajan: Rupee Fall Not Concerning, It’s a Dollar Issue
Former Reserve Bank of India (RBI) Governor Raghuram Rajan has dismissed worries about the recent decline in the Indian rupee’s value, attributing the movement to the strengthening of the US dollar rather than significant depreciation of the rupee. Speaking at a recent event, Rajan highlighted the global currency environment, emphasizing that the rupee’s performance must be assessed in relative terms.
“The rupee hasn’t depreciated as much as people think. It is really a dollar issue,” Rajan stated, pointing to the sharp appreciation of the US dollar against most major currencies due to global economic uncertainties and the Federal Reserve’s monetary tightening. He noted that several currencies, including the euro and the yen, have experienced similar pressures.
Rajan further elaborated that the Indian economy remains resilient despite external headwinds. He urged policymakers and market participants to focus on broader economic indicators rather than short-term currency fluctuations.
India’s central bank has been actively intervening in the forex market to prevent excessive volatility in the rupee. However, Rajan reiterated that controlled currency movements are a natural response to global economic shifts and should not be a cause for alarm.
This perspective aligns with recent trends where the rupee’s relative stability, compared to other emerging market currencies, reflects India’s sound economic fundamentals. Experts believe that maintaining this outlook will help India navigate global challenges while sustaining growth momentum.
