A member of Prime Minister Narendra Modi’s Economic Advisory Council has said that concerns about the possibility of the rupee weakening to 100 against the United States dollar are misplaced, arguing that the currency should be allowed to “discover its own true value”.
Speaking to journalist Smita Prakash on an episode of the ANI podcast on Wednesday, Shamika Ravi said: “So what if the rupee touches 100 to a dollar? It’s just a number.”
Comparing the exchange rate to the valve on a pressure cooker, she said the currency was “settling” and that “something has to give” when pressure builds in the economy.
“The value of the rupee vis-a-vis the dollar, therefore, the exchange rate becomes that valve through which this pressure is going to be taken care of,” she said. “Which is what it means when you say let it discover its own true value.”
She added: “At the end of the day, what you do not want is to jump into this, try to keep the value at a certain level, which leads to inflationary pressures, which is going to have all kinds of other chaotic impacts.”
Ravi said that “you do not want to intervene in a market which is working fine right now”.
“Which is why the austerity measures and the other kind of exhortations from the prime minister and now increasingly from different arms of the government,” she said. “What we do not want is wasteful consumption.”
On May 10, Modi called for “nationally responsible” lifestyle choices and urged citizens to place “the country above all else” amid the supply crunch triggered by the conflict in West Asia. Among the measures he proposed were reviving work-from-home practices adopted during the Covid-19 pandemic, avoiding non-essential foreign travel for a year and reducing edible oil consumption.
In the podcast, Ravi also said that rising costs were the result of a supply shock and that the factors driving those pressures were largely external.
“Our prices will rise because that is the best way to affect demand because this is a supply shock. You’re not going to be able to do very much,” Ravi said, noting that India was already drawing down its foreign exchange reserves.
“These are difficult times,” she said. “I think we must acknowledge the fact that these are trying times not on account of anything we have done domestically.”
She also rejected suggestions that India’s growth was slowing, saying the economy was in a “phase of sustained high growth” and added that this trajectory would continue.
In mid-May the rupee fell to a record low of 96.96 against the United States dollar amid elevated global oil prices and economic headwinds caused by the conflict in West Asia.
The rupee has been the worst-performing Asian currency in 2026, declining by about 5.5% since the conflict began on February 28.
India imports 88% of its crude oil needs and about half of its natural gas requirement. This mostly comes through the Strait of Hormuz, which has been effectively blocked due to the conflict in West Asia.
At 9.30 am on Friday, the rupee was trading at 95.6 against the US dollar.
Edited by Tanya Shrivastava.
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