Amidst the worst single-year decline for the Indian Rupee in over a decade, Finance Minister Nirmala Sitharaman delivered a staunch defense of the currency in the Lok Sabha on Monday. Addressing concerns as the Rupee breached the 95 per USD mark, she asserted that India’s economic fundamentals remain robust and the currency is performing “absolutely fine” when compared to its global peers.
The FM’s remarks come at a time of extreme volatility, as the West Asia conflict and resulting oil supply disruptions have put unprecedented pressure on emerging market currencies.
1. “Theek Chal Raha Hai” (It is Doing Fine)
Replying to supplementary questions on the Rupee’s record lows, Sitharaman emphasized that the currency’s movement must be viewed through the lens of a globally strengthening U.S. Dollar.
- Relative Stability: She noted that the Rupee has depreciated by 4.1% since the start of the West Asia conflict (February 28, 2026). However, she pointed out that several peers have fared worse:
- Thai Baht: ↓ 5.5%
- Philippine Peso: ↓ 4.8%
- South Korean Won: ↓ 4.6%
- Direct Quote: “India’s economy is strong, our fiscal situation is strong… Compared to other emerging economies, the rupee is doing fine (theek chal raha hai)… Absolutely going fine.”
2. Defending the “Macro” Story
The Finance Minister cited three “solid pillars” that she believes protect the Indian economy from a full-blown currency crisis:
- Robust Forex Reserves: India’s reserves remain a critical buffer, currently standing at over $700 billion despite recent interventions by the RBI to curb excessive volatility.
- Fiscal Deficit Management: Sitharaman highlighted that global institutions continue to praise India’s disciplined fiscal management even amidst war-time spending pressures.
- Cooling Inflation: Minister of State for Finance Pankaj Chaudhary supported the FM’s stance, noting that retail inflation eased to an average of 1.9% (April-February FY26), down significantly from previous years.
3. Market Reality vs. Official Stance
Despite the “absolutely fine” verdict from the government, the market reacted with continued caution on the final day of the fiscal year.
| Metric | Status (March 30-31, 2026) |
| Rupee Spot Rate | ₹94.78 – ₹95.21 |
| Annual Depreciation | ~9.9% (Worst in 14 years) |
| RBI Action | Mandated banks to cap Net Open Positions at $100M by April 10. |
| Oil Pressure | Brent Crude hovering near $100/bbl due to the Hormuz blockade. |
4. The “Not a Fall” Narrative
The Finance Minister’s rhetoric echoed her previous famous 2022 statement that “the rupee is not falling, the dollar is strengthening.” By focusing on the DXY (Dollar Index) strength, the government is signaling that it will not engage in a “rate-hike race” with the U.S. Federal Reserve just to defend the currency, preferring instead to let the RBI manage liquidity.
“The value of the rupee is market-determined,” added MoS Pankaj Chaudhary. “The government and the RBI are keeping a close watch, but the fundamentals ensure we are not in a crisis.”
