FM Sitharaman quotes critic Raghuram Rajan to explain rupee dip in LS: ‘Reality is…'
Finance Minister Nirmala Sitharaman, while speaking in the Lok Sabha, quoted former RBI Governor Raghuram Rajan.
Finance Minister Nirmala Sitharaman, while speaking in the Lok Sabha on Tuesday, quoted former RBI Governor Raghuram Rajan, who has been a long-time critic of the PM Narendra Modi-led government's policies.
Sitharaman was talking about the recent dip in the value of the Indian rupee against the US dollar, which recently led to the Asian currency's value cross 87 for the first time ever.
The minister said that volatility has been witnessed by currencies of nearly all major economies across the world. She also pointed out that the dollar index has risen 6.5% from October last year till January this year.
"Former RBI Governor Raghuram Rajan, who even participated in the Bharat Jodo Yatra, has acknowledged on Jan 15,2025 that fixation is always with the rupee-dollar exchange rate, reality is dollar has been strengthening against many currencies including the Euro... So it is really a dollar issue," the FM said while addressing the Lok Sabha.
What did Rajan say?
The economic scholar had earlier spoken about the strengthening dollar as the reason for the fall in the rupee's value.
During an interview with Mojo, Rajan said the dip in rupee's value is moderate as compared to some of the other currencies and that the depreciation isn't that much if one were to look at the real effective exchange rate.
What more did Sitharaman say?
The minister also talking about debt consolidation and the Centre's measures to reduce it. She said the government has been working to cut debt since 2021 and “to make public money go for productive asset building activities”.
She added that overall retail inflation is still within the Reserve Bank of India's tolerance band of 2-6%. Food inflation, which was impacted by adverse weather conditions or supply chain disruptions, has also been attended to, Sitharaman further said.
