New Delhi: As rupee continued to fall to new record lows on Thursday, NITI Aayog Vice Chairman Rajiv Kumar said the Indian currency was overvalued and is moving towards its real value, and that it will not hurt the Indian economy.
“Let’s be clear, the depreciation of the Indian Rupee against the USD is not indicative of a bad time for the Indian economy. Over the past three years, the rupee has been overvalued by approximately 17 per cent and the current depreciation of 9.8 per cent since January is a move towards its natural value,” Kumar tweeted.
During the morning session, the Indian rupee weakened to a fresh record low of 70.32 per US dollar on wider trade deficit, outflow of foreign funds and global cues. It had plunged to its previous lowest-ever mark of 70.08 on Tuesday morning.
Kumar, head of government’s premier policy-making think tank, in another tweet said that the focus should now be on taking advantage of the depreciated rupee in terms of boosting exports and reducing trade deficit. “A sharper focus needs to be on further improving our export performance. As @nasscom and @anandmahindra, both have said that this depreciation will help boost our exports which will be a sure way to reduce the trade and current account deficits,” he added.
To counter the perception that rupee is seeing a major fall, Kumar highlighted the time periods in the previous government when the Indian currency saw steep depreciation. While the rupee depreciated 15.8 per cent against the greenback in the last four years between May 2, 2014 and August 14, 2018, it fell 19.96 per cent between April 2, 2009 and April 30, 2014, showed the table posted by Kumar in his tweet.
Further, according to the table, while the local currency fell 9.6 per cent in the eight months since January 1, 2018, it depreciated by 24.74 per cent in just over six months between May 2, 2013 and November 3, 2013. “To highlight, the Indian economy today is not counted among the fragile five as it was during the period of May-November 2013,” he added.