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While the record fall in the rupee has escalated India’s ongoing economic crisis, the head of private sector lender Kotak Mahindra Bank says the currency’s weakness could actually prove to be good for the economy.
“Some of India’s macro economic imbalances are getting corrected by a weaker rupee. I do believe that we need this, (the rupee’s fall). It is significantly important for India’s competitiveness,” Uday Kotak, Managing Director of India’s fourth-largest bank by market capitalization, Kotak Mahindra Bank, told CNBC Asia’s “ Cash Flow ” on Monday.
“As long as the central bank and (India) as a country ensure that a weaker rupee doesn’t lead to a loss of confidence, I think its good for economic fundamentals and a correction of India’s macro economic balances,” he added.
The rupee , Asia’s worst performing currency this year, has declined 12 percent against the U.S. dollar over the last three months - hitting a record low last week. Weakness in the currency has been driven by global risk aversion and worries over India’s slowing economic growth.
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