Not concerned about rupee at all: Sanjeev Sanyal

Economic Advisory Council to the Prime Minister (EAC-PM) member Sanjeev Sanyal on Thursday said he is not concerned about the rupee at all, arguing that even China and Japan witnessed exchange rate weaknesses during their high growth phases.

Speaking at 'Times Network's India Economic Conclave 2025', Sanyal said since the 90s, the rupee has mostly been allowed to find its own level, but the Reserve Bank of India (RBI) uses its reserves to intervene in either direction to stop excessive volatility.

"I am not concerned about the rupee at all... Let me say that the rupee and its current weakness should not be necessarily conflated with some economic worry, because historically, if you go over time, you will see that economies that are in their high growth phase very often go through a phase of exchange rate weakness," he said.

The rupee sank to a fresh record low, breaching the 91-a-dollar mark for the first time on Tuesday.

"So you go back to, for example, when the Japanese economy was growing very, very fast, their exchange rate was kept quite weak. The Chinese had that in the 90s and 2000s till they began to allow the yuan to strengthen.

"So in itself, it (weakening of rupee) does not mean anything, as long as it is not generating domestic inflation, which clearly, it is not," Sanyal argued.

Since April 2, 2025, when the US announced sweeping tariff hikes across economies, the Indian rupee (INR) has depreciated 5.7 per cent against USD (most amongst the major economies), notwithstanding sporadic phases of appreciation owing to optimism over the US-India trade deal.

Responding to a question on the India-US trade deal, Sanyal said India is pursuing trade negotiations very aggressively with the European Union and the US.

"But let me also be very clear here that as we pursue these, we will have to make decisions where some trade-offs have to be made, but we will work to make sure that they are done to our best national interest," he said.

So for example, Sanyal said in the case of the US, India has not escalated anything.

"We have been careful not to do that. But at the same time, we have not bent down," he said, adding that China and India are now only two countries that have not really bent down to the US pressure.

India and the US are "very close" to finalising the framework for their proposed bilateral trade agreement.

The two countries are holding two parallel negotiations -- one on a framework trade deal to address the high tariffs and another on a comprehensive bilateral trade agreement (BTA).

These talks are important as the Trump administration has imposed steep 50 per cent tariffs on Indian goods entering American markets. The outcomes will also have a positive influence on the trajectory of the rupee, which has depreciated to lifetime lows lately and also breached the psychologically important 90-to-a-dollar mark.