“Destiny of rupee is to depreciate because our inflation is higher than our trade partners and our productivity is lower than our trade partners,” Shah told reporters here.<\/p>\n
Shah, a veteran in the MF space, added that a 2-3 per cent depreciation in the rupee is natural given the imbalances.<\/p>\n
Flows can vary in the short term and influence the currency levels, but there is no room for the rupee to appreciate on a permanent basis, Shah said.![\"ET](\"https:\/\/www.newsbeep.com\/il\/wp-content\/uploads\/2025\/09\/118783427.cms.png\")
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Given the situation on inflation and productivity, depreciation in the currency is also essential from an export competitiveness perspective, he said.<\/p>\n
He added that the real effective exchange rate model also suggests a 2-3 per cent depreciation in the rupee.<\/p>\n
Shah also appreciated the role played by the RBI, and said that the central bank lets the market determine the level of the rupee and intervenes only to contain volatility.<\/p>\n
The direction of the rupee will be decided by the market, the EAC-PM member made it clear.<\/p>\n
“Right now, based on the data disclosed by RBI, they could be short rupee forward in NDF (non-deliverable forward) and local market between USD 50 to 70 billion. So they have intervened to reduce… volatility of rupee, but direction will be decided by the market,” he said.<\/p>\n
When asked if 90 per US dollar is the new normal for the domestic currency, he replied in the affirmative.<\/p>\n
The level will be maintained even if India clinches the trade pact with the US, which has been negotiated for some time, he said.<\/p>\n
Meanwhile, Shah also backed calls for a relook into the press note 3 — a government notification issued in 2020 to curb investments from neighbouring countries into India.<\/p>\n
He said that India will have to find ways of attracting capital flows, and foreign direct investments are a very important means.<\/p>\n","protected":false},"excerpt":{"rendered":"The “destiny” of the rupee is to depreciate further, and the 90-per-dollar mark breached on Wednesday is the…\n","protected":false},"author":2,"featured_media":166724,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[99389,114,99392,184,85,46,99163,99391,99390,99388],"class_list":["post-166723","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-90-per-usd","tag-business","tag-economic-advisory-council-to-the-prime-minister","tag-economy","tag-il","tag-israel","tag-kotak-mahindra","tag-kotak-mahindra-mutual-fund","tag-nilesh-shah","tag-rupee-depreciation"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/166723","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=166723"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/166723\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/166724"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=166723"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=166723"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=166723"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}