Why is the rupee falling? Top Economist Gautam Chikermane shares key insights

Added: 2026-05-26

[00:00:00]Now the question is why is the rupee falling?

[00:00:03]Clearly, India is buying more dollars than selling, which means it is buying overall more goods, more services than selling them. It is importing It is exporting more capital than it is importing capital. So, these are the two aspects, capital account and current account.

[00:00:22]Uh on the on the exports front, which is the current account, we need to become far more competitive.

[00:00:29]The falling rupee may give us that competition. However, so far this opportunity doesn't seem to be visible.

[00:00:36]But then, I think these are they they take their own time. We need to give it time.

[00:00:40]>> short-term in premium yield.

[00:00:41]>> Nothing changes overnight except the except the financial markets. Financial markets change every day, every moment.

[00:00:47]Sensex goes up and down. Currency markets even more. The debt markets are even more volatile. But the business decisions are in they they come with a lag.

[00:00:57]Uh so, that business decision, we hope that since if the rupee becomes more competitive and cheaper, then you'll be the exporters would be able to sell their goods better.

[00:01:08]The second part is the FIIs, which is foreign investors, not direct investment, but foreign stock market investment.

[00:01:19]I think that is a function of global economy. It has something to do with India, but not entirely. If the United States yields are going up, it is clear that not only India, the whole world's money, a large chunk of it will shift base to the United States.

[00:01:36]Uh the moment interest interest rates uh fall, it will start coming back again to seek a higher return.

[00:01:43]Uh in the Indian market over the past 5-7 years has given spectacular returns.

[00:01:47]So, if there is 1 year of bad returns, it's okay. You you take it in stride.

[00:01:51]You can't say that everything will go only in one direction, which is up. That never happens.

[00:01:57]No economy does that.

[00:01:59]You have foreign investors come, foreign investors go, domestic investors take charge, and and so on. This is a This is a long-term play. And if you're in the stock markets, then you're not here for 1 year, you're not here for 6 months, or 2. You're here for the long term, and there is nothing to worry in about the India story as far as the stock markets go in India. There There's nothing to worry.