The rupee ended the year at 82.72 to the US dollar, down from 74.33 at the end of 2021, while the dollar index headed for its biggest annual gain since 2015.
GRAPHICS : Indian Rupee Biggest Loser Among Asian FX in 2022 – https://www.reuters.com/graphics/INDIA-RUPEE/jnpwyydjopw/chart.png
GRAPHIC: Indian rupee marks biggest annual loss since 2013 – https://www.reuters.com/graphics/INDIA-RUPEE/xmpjkkdbnvr/chart.png
The rupee has also been a victim of a surge in oil prices due to the Russia-Ukraine conflict, pushing India’s current account deficit to a record high in the ninth quarter in absolute terms.
Going into 2023, market participants believe the rupee will trade with a bullish bias, seeking relief from commodity price declines and expect foreign investors to continue buying shares. India.
“The raised could keep interest rates higher for longer than anticipated and if the slowdown in advanced economies turns into a protracted recession, India’s exports could be severely impacted, here are two risks. major risk to the rupee,” said Raj Deepak Singh, head of derivatives research at .Most, where traders and analysts expect the coin to move in a tight 81.50 range. -83.50 in the first quarter.
Equity inflows will be an important metric to track the rupee for foreign investors, analysts say.
But considering a number of uncertainties will unfold in 2023, such as tight monetary policy conditions, a possible recession in some economies, and ongoing geopolitical conflicts As a result, it becomes difficult to gauge the direction of the stock market, they added.
“There will be a period of weakness in the global equity markets… If Indian stocks sell off, I will be less bullish on the rupee,” Christopher said. Kingforex strategist at OCBC Bank.
Wong said that even if the rupee strengthens, it could still underperform Asian currencies and will not be the first choice in the emerging market complex, and expects the Korean won to South Korea and the Thai baht will appreciate the most next year.
