According to economists, the rupee is likely to remain under pressure next year and may even touch 85 against the US dollar.
Since Russia’s invasion of Ukraine in late February resulted in a rise in crude oil prices and supply chain disruptions, the rupee came under heavy pressure. The domestic currency had touched an all-time low of 83 against the dollar on October 19.
On Thursday, the rupee had gained 23 paise to close at 81.70 against the dollar.
During a panel discussion at the SBI Banking & Economic Conclave here on Thursday, various economists said the rupee will remain under pressure in view of the widening current account deficit, which is expected to close to 4 per cent of GDP in the current fiscal. Used to be.
Foreign exchange earnings are also under pressure as exports have started falling since last month, he said and the rupee is expected to trade between a high of 82 and a low of 85 in 2023.
Deepak Mishra, chief executive officer of economic think-tank ICRIER, and Sajid Chinoy, chief economist at JP Morgan India, forecast a low of 85 and a high of 83 for the rupee next year.
Soumya Kanti Ghosh, Group Chief Economic Adviser, State Bank of India (SBI), has given the best estimate for the rupee at 80-82 against the dollar, which is more or less the current level.
Further, he added that the rupee may rise to 81 in the first half of 2023 and fall to 82 in the second half.
Rajeshwari Sengupta, associate professor at IGIDR, said the rupee is expected to trade at 84 to a dollar and further fall to 85 in the second half of next year, if the Reserve Bank of India (RBI) stops intervening in the money. . Market.
Ashima Goyal, an external member on the RBI’s rate-setting monetary policy committee, said the rupee would start doing better in the second half of next year.
According to Chinoy, the Dollar Volatility Index or DXY is at a two-decade high as the US Federal Reserve is aggressively raising rates due to high inflation in the US economy.
Similarly, the European Central Bank has been on a rate-hike cycle, which it hasn’t done at all in the past following gas shortages after Russia invaded Ukraine.