'Just a number': PM's economic adviser downplays rupee-at-100 panic
What's the story
Shamika Ravi, a member of the Economic Advisory Council to Prime Minister Narendra Modi, has downplayed fears of the Indian rupee falling to 100 against the US dollar. In an interview with ANI, she dismissed the panic, saying, "So what? 100 is just a number." She stressed that instead of defending a specific exchange rate, attention should be paid to managing the overall economic impact of global supply shocks.
Economic stability
Don't intervene in well-functioning market: Ravi
Ravi warned against intervening in a market that is functioning well, adding this approach is in line with the government's focus on fiscal discipline and curbing wasteful consumption. "At the end of the day, what you do not want is to jump into this, try to keep the value at a certain level, which leads to inflationary pressures, which is going to have all kinds of other chaotic impacts," she said.
Economic measures
Price rise as economy adjusts to supply shock
Ravi acknowledged that prices would rise as the economy adjusts to a supply shock. She said managing demand is one of the limited tools available in response to such disruptions. India has already started using its foreign exchange reserves in this process. When questioned how long India could continue using its reserves, Ravi said, "As long as it is required." She expressed confidence that new international agreements would help rebuild these reserves over time.
Economic resilience
India's domestic demand-driven growth model
Ravi also emphasized that India's economy is on a strong growth trajectory and has been resilient to major global shocks over the past decade. She credited this resilience to India's domestic demand-driven growth model, which helps the country weather external economic disruptions better than export-driven economies like South Korea, Vietnam, Taiwan, and China. "Indian economy is in a phase of sustained high growth," she said.