Rupee's decline may or may not assist exports, says Finance Minister

27 Sep 2022 , 09:05 AM

Nirmala Sitharaman, India’s finance minister, said on Monday that a weakening rupee could in theory boost the country’s exports, depending on the state of the global economy.

There are many who claim that exports benefit from the rupee’s decline as well. Theoretically, it could, but given the current environment–a recession abroad, with demand not really being as strong as it should be even a decline in the rupee may or may not benefit our exports. In response to a query during a CNN-News18 event, Sitharaman stated, “We are aware of these fundamental realities.

In response to the rupee hitting a new low, Sitharaman stated that because to the robust macroeconomic fundamentals of India, the currency is holding up well and that other currencies have fallen at a higher rate than the rupee. Is it any comfort, then? Partially, she continued, “because your economy speaks for itself when you discuss its exchange rate.

According to Sitharaman, the central bank has spent close to $75 billion to halt sharp changes and volatility in the rupee-to-dollar exchange rate. “The RBI does not want to set the exchange rate; the government does not support it. She said that the market will determine the value of the Indian rupee and its exchange rate.

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