India’s Finance Ministry and RBI closely monitor the rupee’s slide below ₹90 per dollar, ready to intervene if pressures intensify, Economic Affairs Secretary Anuradha Thakur affirmed post-Budget 2026. She highlighted the currency’s depreciation aids export competitiveness while stressing vigilance on flows.
Rupee Under Watch: Below 90 Mark Triggers Alert
The rupee breached the psychological ₹90/USD barrier – first time since late 2025 – depreciating ~6.5% from April 1, 2025, to January 22, 2026, outpacing peers like Philippine peso/Indonesian rupiah and matching yen’s 5.5% fall. “Anything above 90, everyone starts talking… We start watching carefully,” Thakur told PTI, coordinating with RBI on interventions if “uncomfortable”.
Budget Boosts: AIF Reforms, PROI Investment Hike
Budget 2026 addresses long-standing industry asks:
- AIFs as LLPs: Trusts transition to LLPs for limited liability, streamlined partner entry/exit filings – operational ease met.
- PROI Portfolio Route: Overseas Indians invest in listed equity via PIS; individual cap up 5%→10%, aggregate 10%→24% – inflows catalyst.
“Concrete steps for medium/long-term growth in PPP mode (medical hubs, university townships),” Thakur optimistic on market recovery.
Depreciation Pros & Cons
Upside: Boosts exports amid US tariffs/global slowdown; aligns with RBI’s neutral stance.
Downside: Raises import costs (oil, gold/silver at peaks), inflation pass-through; $17B+ FII outflows YTD exacerbate.
Economic Survey notes rupee’s weakness vs. Asian peers; RBI swaps ($10B) stabilized without depleting $709B forex kitty.
Policy Coordination: FinMin-RBI Synergy
“We watch with regulators… handle if uncomfortable,” Thakur: RBI leads via interventions/swaps; govt eyes flows/FDI via Budget tweaks. Post-Dec cuts (125 bps), focus balances growth/stability for FY27 6.8-7.2% GDP.
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