As the Indian rupee tumbles to multi-year lows, Chief Economic Advisor V. Anant Nageswaran is flipping the narrative. Calling the currency ‘fundamentally undervalued,’ he positions its current weakness as an ideal buying window for investors confident in India’s economic trajectory.
Speaking to Bloomberg, Nageswaran dismissed short-term jitters, highlighting the rupee’s appeal as an entry point. This comes against a backdrop of persistent pressure, with the unit sliding 24 paise to 94.25 against the dollar on Friday—its fifth consecutive decline.
Year-to-date in 2026, the rupee has underperformed all Asian peers, dragged down by a perfect storm of factors. Surging Brent crude above $100/barrel, fueled by West Asian unrest, hits India’s import bill hard. Inflation risks are mounting, squeezing the currency further.
FPI outflows have accelerated dramatically, exceeding $18.79 billion this month—eclipsing last year’s peak. Investors fleeing Indian stocks amid global uncertainty have amplified the rupee’s woes.
Analysts point to India’s oil dependency as a key vulnerability. Any spike in global energy prices reverberates strongly through the forex market.
Despite these challenges, India’s economic stewards project resilience. RBI Governor Sanjay Malhotra eyes 6.9% growth this fiscal, tempering downgrades from global tensions.
Earlier this month, Nageswaran outlined conflict’s four-pronged impact: elevated energy prices, supply chain snarls for commodities, logistics cost surges, and remittance shortfalls. ‘Patience is key,’ he urged, as economies adjust.
For patient investors, the rupee’s dip signals value. Betting on India’s structural strengths—demographic advantages, digital leapfrogging, and manufacturing push—could yield handsome returns. Nageswaran’s outlook reminds us: in volatile times, long-term vision trumps transient fear.
