Rupee Weakness Cyclical, Not Structural; FY27 Recovery Expected: S Mahendra Dev
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Moneycontrol•29-01-2026, 06:20
Rupee Weakness Cyclical, Not Structural; FY27 Recovery Expected: S Mahendra Dev
- •S Mahendra Dev, Chairman, Prime Minister’s Economic Advisory Council, states rupee depreciation is cyclical, not structural.
- •He anticipates the rupee's weakening against the US dollar will be arrested by FY27 due to higher FPI and FDI inflows.
- •The rupee weakened over 5% in 2025, closing at Rs 91.79/$ on Wednesday, impacting import costs.
- •Uncertainty regarding the US-India trade deal and FII outflows due to AI stock investments in the US are contributing factors.
- •Increased FDI in India's technology sector and investments in data centers are expected to drive rupee appreciation.
Why It Matters: Rupee's current weakness is temporary; a strong recovery is projected by FY27 driven by increased foreign investments.
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