New Delhi: The rupee depreciated 7.8% in the last financial year, the most since 2019-20, Business Standard has reported.
The rupee fell more than 10% in 2022, performing worse than almost all Asian currencies. It has closed the Financial Year of 2023 at 82.18 to a dollar. At this time last year, it was 75.79. At its lowest in October, when it touched 83.28, the rupee began to appreciate as the current account deficit turned into surplus in the fourth quarter.
The Reserve Bank of India’s intervention also likely prevented an October-like fall in early January.
The Business Standard report noted that it has ended FY23 better than currencies like the Chinese renminbi, South Korean won, Malaysian ringgit, and Philippine peso.
The rupee had ended 2022 as one of the worst-performing Asian currencies with a fall of 10.14%, its biggest annual decline since 2013.
An increasing oil import bill triggered by the Russia-Ukraine war, enormous domestic inflation and the US Federal Reserve’s sharp interest rate hikes have put the rupee under considerable pressure.
Early in March, a Reuters poll of 34 foreign exchange strategists had found that the Indian rupee will remain at its current level three months from now and gain only marginally by the end of February 2024.
Anindya Banerjee, vice-president of currency derivatives and interest rate derivatives at Kotak Securities told Business Standard that the expectation is that the rupee will be less volatile in FY24 “as central banks slowly end their rate-hiking campaign and move towards lowering rates.”