Disappointing for India, Rupee Worst Asian Currency in 2022

In 2022, the rupee fell by 11.3 percent against the dollar due to the aggressive policy of the US Fed Reserve. Rs. The Indian rupee was the worst performing Asian currency with a fall of 8.39, the biggest annual decline since 2013. By the end of the current year i.e. on December 31, 2021, the rupee was trading at 74.33 against the dollar. which broke the highest at the end of 2022 with a close at 82.72. During the year, the rupee hit a record low of 83.27 per dollar in October. While the dollar index was moving steadily along the highest level since 2015.

Due to the war between Russia and Ukraine and the crisis in crude oil prices, the rupee weakened as the current account deficit hit a record high in the September quarter. According to currency experts, the stance of the Fed Reserve will further strengthen the dollar. As a result, the rupee will continue to depreciate against the dollar in the first quarter of 2023. Apart from that, there are hopes of increasing foreign investment in the equity market.

The Fed may continue to hike rates longer than expected and India's exports could take a hit if the slowdown in advanced economies persists, two key risks for the rupee. Most traders and analysts expect the rupee to move between the range of 81.50-83.50 against the dollar in the first quarter. Raj Deepak Singh, Head of ICICI Securities Derivatives Research said. Analysts believe that equity inflows will be a key metric for foreign investors to monitor the rupee as well. Even if the rupee improves, it may still underperform the Asian and may not be a top pick in emerging markets.

Most traders and analysts expect the Indian currency to move between the range of 81.50-83.50 in the first quarter. Analysts said equity inflows will also be a key metric for foreign investors to monitor the rupee.