FM Says Rupee Must Find Its Own Level, Calls Exchange Rates 'Too Sensitive'

Finance Minister Nirmala Sitharaman has offered the government’s first response to the rupee’s recent movements, asserting that the currency must remain market-determined and “find its own level.”

Speaking at the Hindustan Times Leadership Summit, she emphasised that exchange rates are “too sensitive” to be dictated or overly managed and should instead be viewed in the context of current economic fundamentals.

Sitharaman pushed back against comparisons with earlier periods, noting that the economy’s health today is far stronger than during the time when the current government sat in Opposition. “Today the fundamentals of the economy are sorted. This currency debate needs to be circumscribed with today's realities,” she said.

The Minister added that a weaker rupee is not entirely negative, pointing out that exporters often benefit from such phases. “When the rupee value comes down, I’m sure our exporters have started to capitalise on this,” she said, adding that in periods when tariffs hit Indian products, a softer rupee can provide “some respite.”

Sitharaman urged markets and observers to read the rupee’s movement alongside the broader macro story. “The economy’s strength has to be read along with the rupee level,” she stated, underscoring that currency fluctuations alone do not define economic performance.

On the subject of domestic savings, the Minister dismissed concerns that household savings are declining, arguing instead that savings patterns are evolving. “Savings are growing, and so is investment today,” she said. While traditional savings channels such as public banks or post offices may show shifts, she noted that “overall savings are not going down” and total assets are, in fact, rising, some with the aid of bank credit.

She stressed that savings today are being channelled into multiple avenues, including financial assets, market instruments and newer investment products. “We shouldn’t narrow the debate on savings to what’s going into public banks or post offices,” she added.