The rupee descended to a fresh record low, breaching the 91-a-dollar mark for the first time before ending 15 paise weaker at 90.93 against the greenback on Tuesday.
Axis Bank chief economist Neelkanth Mishra on Tuesday said the rupee is likely to depreciate further, and there is no need to panic over the movements in the domestic currency, which breached its historic low earlier in the day.
Mishra, who is also a part-time member in the Economic Advisory Council to the PM, said it will be wiser for the RBI to not target a particular level in its interventions.
“The reason I think we should not be panicking is that with $685-690 billion, you are in a very strong position,” Mishra said, pointing to the forex kitty levels.
Mishra said the RBI’s strategy when it comes to bets in the forwards market is creating a problem, and added that protecting the 83 to a dollar level earlier was a mistake.
“Those past sins are still haunting us,” he said.
The INR will depreciate more and is estimated to be at ₹92-94 to a dollar by June 2027, Mishra said, stressing that there is no need to be worried over it.
The rupee descended to a fresh record low, breaching the 91-a-dollar mark for the first time before ending 15 paise weaker at 90.93 against the greenback on Tuesday.
From a fundamental perspective, there is no challenge for the rupee, Mishra said, pointing to investment commitments by foreign investors like Amazon, Microsoft etc over the past few days. The balance of payments will also be contained within the manageable levels, he added.
It is the speculative aspect where the challenges are emerging for the currency, he said.
The foreign institutional investors are pulling out money from the Indian markets because of India being in a poor neighbourhood of emerging market countries and also earning downgrades, he said.
On the US-India trade deal, Mishra pointed out that a judgment from the US Supreme Court is imminent on the constitutionality of tariffs, and with widespread expectations of President Donald Trump’s moves being struck down, it will be “wise” for India not to rush into a bilateral pact where it makes many concessions.
Amid concerns on the sluggish private capital expenditure growth, Mishra said data of the investments by top-200 listed companies suggests an 18 per cent compounded annual growth on this aspect in the three fiscals to FY25, and added that the same is up 15 per cent in the first half of FY26 as well if one were to exclude the financial services sector.
The analyst pegged India’s growth to go up to 7.5 per cent in FY27, and pointed out that as India Inc sees the growth and gets confident with the momentum, more investment decisions will be made.
Mishra said India is resembling a giant construction site right now with buildouts happening even in smaller cities, and added that what is bad for air quality and human health is a blessing for the economy.
Even as the growth races ahead, it will not stoke inflation and is likely to ensure that the RBI does not hike the key rates, Mishra said, adding that India will be low for long on rates.
Published on December 17, 2025
