Chief Economic Adviser V. Anantha Nageswaran said India’s currency, though under short-term pressure, remains “fundamentally undervalued” and offers a strong entry point for long-term investors. Speaking to Bloomberg, he described the rupee’s current valuation as attractive given India’s growth potential, even as the currency slipped for the fifth straight session on Friday to 94.25 against the US dollar. The decline has been driven by Brent crude prices staying above $100 per barrel amid Middle East tensions, inflation concerns, and heavy foreign portfolio investor outflows that have already surpassed last year’s record annual exit of $18.79 billion. Analysts noted that India’s dependence on energy imports makes the rupee particularly vulnerable to global oil shocks, contributing to its status as Asia’s worst-performing currency in 2026.
Despite these challenges, policymakers remain cautiously optimistic. Nageswaran pointed out that India’s fiscal discipline provides resilience, while Finance Secretary Sanjay Malhotra recently projected growth at 6.9% for the current financial year. Earlier this month, Nageswaran warned that rising oil prices could weigh on the global economy, highlighting risks through elevated energy costs, disrupted commodity supplies, higher logistics and insurance expenses, and potential declines in remittance flows. He stressed that patience will be necessary as the global situation evolves, noting that normalization may take longer than expected.