The rupee's 'new lows': Why it's not necessarily a cause for concern

The framers of a 'strong currency' policy ignore that almost every country with a successful long-term record of development has pursued a 'weak currency' policy, writes T N Ninan

When P Chidambaram was finance minister, among the things that used to provoke the famously thin-skinned politician were newspaper headlines that said “Rupee falls to a new low”. Or to a “record low”. While he saw a falling currency as a reflection on his performance, he had a point about the headlines: If a generally weak currency like the rupee is falling, every fall (even if by a few paise) could be to a “record low”. Both the headlines and the minister’s response betrayed a mental bias against a weak currency. Indeed, the currency’s fall gets more attention than its