India not defending rupee, let market forces decide

India does not need to defend the rupee because its economic fundamentals are such that the currency can take care of itself, the country’s Chief Economic Adviser, V Anantha Nageswaran, said on Tuesday.

“I think India isn’t defending the rupee, India is just making sure that the market forces and the economic fundamentals direct the rupee in a particular direction and making sure it happens smoothly and gradually,” he told an event.

“I don’t think Indian fundamentals are such that we need to defend the rupee. The rupee can take care of itself.” The chief economic adviser also said India should be able to grow at about 7% annually this decade as investment spending is expected to rise and the digital economy picks up.

The government has already said it expects the world’s fifth-largest economy to grow at more than 7% this fiscal year, after it expanded by 13.5% in the April-to-June quarter, the fastest pace in a year.

Economists say growth is likely to lose momentum in the coming quarters as higher interest rates cool economic activity.

Published in The Express Tribune, September 14^th, 2022.

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