At the 23rd edition of the Hindustan Times Leadership Summit (HTLS) 2025, Finance Minister Nirmala Sitharaman addressed a wide array of economic topics, including the current value of the Indian rupee against the US dollar. Speaking on Saturday, the Finance Minister stressed that the rupee, despite recent fluctuations, will ultimately “find its own level,” and urged observers to look beyond short-term movements to the broader fundamentals of the Indian economy.

Context of the Rupee Debate

The rupee’s performance has been in the spotlight in recent weeks, particularly following its record low against the dollar on December 3, when the currency touched 90.43 per US dollar. Analysts attributed the decline to multiple factors, including selling pressure from foreign investors and rising crude oil prices. However, the rupee rebounded the following day, appreciating by 26 paise to close at 89.89, supported in part by softer-than-expected US non-farm payroll data, which weakened the US dollar index.

In this context, questions regarding the “appropriate” level of the rupee and its implications for India’s trade, inflation, and economic stability have drawn attention both from the media and political circles. Observers have debated whether the currency is overvalued or undervalued, and whether government interventions or policy adjustments are needed to stabilize it.

Nirmala Sitharaman on the Currency

Addressing these questions at HTLS 2025, Finance Minister Sitharaman emphasised that short-term volatility should not be over-interpreted. “The rupee will find its own level,” she said, noting that the currency’s movements are ultimately influenced by a combination of market dynamics, investor sentiment, and macroeconomic fundamentals.

She further explained that when her party had previously raised concerns about the rupee while in Opposition, the economic circumstances were markedly different. “I am quite tempted to say a lot of things. Rupee, currency exchange rates, etc., are rather too sensitive… inflation rate was so high back then, the economy was fragile, and when your currency also takes a hit, it is nobody’s bright spark,” she said. By highlighting the difference in circumstances, Sitharaman suggested that a direct comparison between past and present conditions would be misleading.

The Finance Minister underscored that currency debates must be understood within the broader context of economic fundamentals, including GDP growth, inflation, foreign exchange reserves, and external trade balances. “Look at the fundamentals of the economy, where we stand. Some factors are very important which position India in a very different ledge… this currency debate will have to be circumscribed by those realities,” she said.

Economic Fundamentals Supporting the Rupee

Sitharaman’s remarks reflect a focus on structural factors that influence the rupee’s value. These include India’s current account position, the balance of trade, foreign investment flows, and domestic macroeconomic stability. While short-term market pressures can drive fluctuations, she implied that the rupee’s long-term trajectory is anchored in these underlying fundamentals.

Experts note that India’s foreign exchange reserves, fiscal policies, and structural reforms—such as the promotion of digital transactions, export facilitation measures, and strategic energy procurement—provide resilience against abrupt shocks in currency markets. Sitharaman’s remarks at HTLS highlighted the government’s emphasis on these foundational elements as key to maintaining stability.

Addressing Market Volatility

The Finance Minister also touched upon the role of external factors in influencing currency movements, citing global commodity prices and foreign investment patterns. For instance, rising crude oil prices, which directly affect India’s import bill, were a significant contributor to recent rupee fluctuations. Similarly, investment flows in response to global economic data, such as US employment statistics, can create temporary pressures on the currency.

By situating these factors within a broader framework, Sitharaman sought to reassure markets, investors, and the public that short-term turbulence should not overshadow India’s long-term economic trajectory. “We have to consider both domestic and external variables and focus on the bigger picture,” she stated, emphasizing a measured, policy-driven approach to economic management.

Political Dimensions

The rupee often becomes a subject of political debate, with opposition parties and commentators drawing attention to its fluctuations to critique government policy. Sitharaman addressed this aspect candidly, noting the contrast between political rhetoric when her party was in Opposition and the current economic reality.

While in Opposition, concerns over a weakening rupee were often framed within broader critiques of government performance, particularly regarding inflation and fiscal management. Sitharaman highlighted that such discussions occurred in a context where the Indian economy faced higher inflation and structural vulnerabilities. In the current scenario, she implied, India’s economy is better positioned to absorb currency fluctuations without adverse impacts on overall growth or financial stability.

Outlook for the Rupee

While the rupee has experienced volatility in recent weeks, Sitharaman’s message at HTLS 2025 was one of calm reassurance. She emphasised that the currency will naturally find equilibrium over time, as market forces interact with India’s strong economic fundamentals.

Analysts interpret her comments as an acknowledgment of normal market dynamics, combined with an implicit assertion that the government has confidence in the resilience of India’s economy. By framing the conversation around structural fundamentals rather than daily market fluctuations, Sitharaman reinforced a message of stability and long-term economic confidence.

Policy Implications

Sitharaman’s remarks also underscore the importance of strategic policymaking in maintaining currency stability. By focusing on fundamentals such as fiscal prudence, export promotion, and energy security, the government aims to mitigate excessive volatility while supporting sustainable economic growth.

Her comments at HTLS 2025 can also be seen as part of a broader communication strategy aimed at reassuring both domestic and international investors. By emphasizing that the rupee will “find its own level,” she signals that the government will rely on market mechanisms and structural resilience, rather than reactive interventions, to navigate currency fluctuations.

Conclusion

Finance Minister Nirmala Sitharaman’s address at HTLS 2025 highlighted a calm, analytical approach to the recent volatility in the rupee-dollar exchange rate. By situating currency movements within the context of broader economic fundamentals, she reassured markets, investors, and the public that short-term fluctuations are a natural part of economic dynamics.

Her remarks also drew a distinction between political rhetoric during her party’s tenure in Opposition and the current economic scenario, emphasizing that the rupee’s recent movements occur against a backdrop of stronger economic stability and improved fundamentals.

In summary, Sitharaman’s message at HTLS 2025 was clear: while the rupee may experience temporary fluctuations due to external pressures and market sentiment, it will ultimately stabilize in line with India’s robust economic fundamentals. By reinforcing this perspective, she sought to balance political narratives, market realities, and public expectations, underscoring a steady, confident approach to managing India’s macroeconomic environment.