The Indian rupee remained under pressure on Friday, opening at 91.9125 against the US dollar, close to its previous close, after touching an all-time low of 91.9850 in the previous session. The currency has fallen about 2.3% so far this month and is on track for its worst monthly performance since September 2022.
The decline has sparked concern, but economists and policymakers argue that the rupee’s weakness is largely driven by global factors rather than domestic economic stress. Slowing foreign capital inflows, elevated global interest rates and ongoing geopolitical uncertainty have reduced investor appetite for emerging markets, placing pressure on currencies like the rupee.
At the Economic Survey 2026 briefing, Chief Economic Adviser V Anantha Nageswaran emphasised that currency depreciation is not unique to India. He pointed out that most countries with current account deficits have seen similar pressure as global capital flows weaken. According to him, the rupee’s longer-term performance remains relatively stable when compared with global peers, and the recent move does not signal weakness in India’s macroeconomic fundamentals.
Nageswaran also highlighted that while net foreign direct investment appears lower, gross FDI inflows into India remain strong, with FY26 inflows at least 10% higher than the previous year. He added that portfolio investors are currently cautious due to valuation concerns, global trade uncertainty and higher returns available in developed markets.
Looking ahead, the CEA stressed that sustainable currency strength depends on strengthening India’s manufacturing base and export competitiveness, which would improve the current account balance and support long-term rupee stability.
While markets remain cautious, the Reserve Bank of India continues to manage volatility rather than target any specific exchange rate. Analysts note that the rupee’s fall warrants close monitoring, but does not indicate immediate economic distress.
