Stronger currency is not identical to strength in economy

NEW DELHI: It is a misguided notion that strong currency rates are identical to national growth and economic strength, chief economic adviser Arvind Subramanian said on Friday. He said that foreign exchange competitiveness is critical for growth and called for a rupee exchange rate that would promote exports.

Championing the cause of competitive exchange rates, he said that this factor is a very “important instrument to maintain competitiveness and boost growth,“ Subramanian was quoted as saying in a CII release.

Subramanian said that the strong exchange rates over the past two years are hugely impacting exports and stressed that India Inc should be more vocal on exchange rate issues.

Earlier this month, commerce and industry minister Nirmala Sitharaman had implicitly backed a stronger rupee and said export competitiveness is not just linked to the currency but better infrastructure and logistics, which are the government's focus areas.“What is important for us to understand is that the economy gets reflected through your currency .

Yes, when the rupee goes up or when the rupee is high, exports tend to suffer is a feeling that has been well-established in economic parlance. But, we are talking of an economy which in the last few years has a blend of exports and domestic industry . Unlike China, we have not really put our focus only on exports and exportdriven growth...,“ she had told TOI in an interview.