Rupee Weakness: Global Uncertainty, Capital Flows Drive Pressure, Aids Exports: CEA
Budget
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CNBC TV18•01-02-2026, 20:55
Rupee Weakness: Global Uncertainty, Capital Flows Drive Pressure, Aids Exports: CEA
- •Chief Economic Adviser V Anantha Nageswaran stated that the rupee's recent weakness is due to global uncertainty and volatile capital flows, not solvable by short-term Budget measures.
- •India's status as a capital-importing economy makes the rupee sensitive to global risk sentiment and geopolitical developments, making capital inflow certainty difficult.
- •Nageswaran noted that a weaker rupee helps cushion the impact of higher global tariffs and supports India’s export sector, offsetting external economic headwinds.
- •He cautioned against directly linking exchange-rate movements to Budget arithmetic, as currency dynamics do not translate one-to-one into fiscal numbers.
- •A sustained improvement in currency outlook depends on a broader shift in global sentiment, potentially aided by a resolution of the tariff situation with the United States.
Why It Matters: Rupee's weakness is driven by global factors, aiding exports, with long-term stability tied to global sentiment shifts.
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