Rupee Undervalued: Economic Survey Highlights India's Strong Fundamentals Despite Weakness
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News18•29-01-2026, 12:43
Rupee Undervalued: Economic Survey Highlights India's Strong Fundamentals Despite Weakness
- •The Economic Survey 2025-26 states the rupee's recent weakness against the US dollar does not reflect India's strong economic fundamentals.
- •The Survey attributes the rupee's underperformance in 2025 to external flows and global uncertainty, not domestic macroeconomic deterioration.
- •India's economy is projected to grow 7.2% in FY27, supported by contained inflation, healthy banks, and robust corporate balance sheets.
- •A balance of payments deficit in H1 FY26 and market uncertainty over a US trade deal contributed to the rupee's depreciation.
- •An undervalued rupee offers a strategic cushion against higher American tariffs and rising crude oil prices, but may cause investor hesitancy.
Why It Matters: The Economic Survey asserts the rupee is undervalued, with India's strong economic fundamentals masked by external pressures.
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