Govt & RBI Actively Monitoring Currency Fluctuations Amid Global Volatility: FM Sitharaman

New Delhi, Feb 14 (KNN) Finance Minister Nirmala Sitharaman addressed concerns regarding the Indian rupee's depreciation during her response to the FY26 Budget discussion in the Rajya Sabha on Thursday. 

The Finance Minister assured that both the government and the Reserve Bank of India are actively working to stabilise the currency while maintaining continuous oversight of its fluctuations.

In her comprehensive address, Sitharaman emphasised the complex relationship between currency valuation and economic competitiveness. 

She noted that overvalued currencies can potentially undermine national competitiveness by making exports more expensive, necessitating additional support for domestic companies. 

This observation comes amid ongoing discussions about the rupee's value relative to other currencies, particularly the US dollar.

The Finance Minister highlighted that the fourth quarter of 2024 experienced significant currency volatility across major economies, not exclusively affecting India. 

She explained that the Indian rupee's movement, similar to other Asian currencies, has been influenced by multiple factors, including the dollar index, capital flow trends, interest rate levels, and crude oil price movements. 

The depreciation against the US dollar was attributed to prevailing uncertainty in the global macroeconomic environment.

Addressing the broader context of the FY26 Budget, Sitharaman emphasised its strategic preparation in light of significant external challenges. 

She particularly noted the uncertainty surrounding critical Indian imports essential for the country's growth trajectory. 

The Finance Minister acknowledged the dynamic nature of current economic conditions, stating that traditional modeling approaches face limitations in predicting trends accurately.

The Budget's core objectives remain focused on accelerating growth, ensuring inclusive development, stimulating private sector investments, and enhancing the spending power of India's expanding middle class. 

Sitharaman also addressed the complex dynamics of global trade, noting the paradox between free market rhetoric and the reality of aggressive tariff and non-tariff barriers implemented by various countries.

In terms of fiscal management, the Finance Minister highlighted debt consolidation as a key priority in the Budget, alongside efforts to strengthen states' liquidity positions. 

She drew attention to the availability of unused funds, emphasising the importance of utilising existing resources effectively before seeking additional funding. 

This approach underscores the government's commitment to prudent financial management while maintaining growth momentum.

The Finance Minister's comprehensive response reflects the government's balanced approach to managing currency stability while pursuing broader economic objectives in an increasingly complex global environment.

(KNN Bureau)