Rupee Rises 6 Paise To 82.75 A Dollar, But Ends 2022 With 12% Losses
The rupee rose slightly on Friday, but ended the year 12 per cent lower against the US dollar, which was headed for its best year since 2015.
On the last interbank foreign exchange trading day of the year, the rupee was changing hands at 82.7487 per dollar, compared to its previous close of 82.8087 on Thursday, according to Bloomberg.
PTI reported that the domestic currency rose 15 paise to provisionally end at 82.72 against the US dollar.
"Despite today being the quarter end, the rupee could not make much headway as it remained in a range of 82.69 to 82.81 even as the dollar index was down," said Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisors.
The domestic currency has fallen dramatically this year, from about 74 before the Ukraine crisis to multiple record lows beyond 83 per dollar, a level never seen before.
2022 has been a turbulent year for financial markets, marked by the Russia-Ukraine war, near decade-high global inflation and the resultant aggressive tightening by major central banks worldwide.
The Federal Reserve's aggressive tightening of monetary policy and worries over the outlook for global economy have helped the dollar this year and the US currency was on track for its best yearly performance in seven years.
This year, the US dollar index, which measures the greenback against a basket of major peers, has rise over 8 per cent, the most since 2015.
To combat rising inflation, the Fed has increased rates by a total of 425 basis points since March, a move that has maintained the dollar strong for the most of the year.
The greenback has unwound from its massive rise, however, on predictions that the central bank may not need to hike rates as much as earlier anticipated. The dollar has fallen over 7 per cent this quarter.
"I expect the king dollar to lose its crown and the dollar to make a more decisive turn by the middle of next year," Moh Siong Sim, Currency Strategist at Bank of Singapore, told Reuters.
In an effort to control inflation even at the risk of harming their economies, policymakers from the European Central Bank and the Bank of England have hinted at more rate hikes.
"The ECB and BoE forced to tighten policy more aggressively amid stubborn cost-shocks, is almost certain to tip Europe into a fairly deep recession," Vishnu Varathan, Head of Economics and Strategy at Mizuho Bank, told Reuters.
The Australian dollar was on track for a 7 per cent annual decline and the kiwi was set to suffer its worst year-to-date decline since 2015.
The offshore yuan, which exchanged at 6.9745 to the dollar, was on track for a roughly 9 per cent annual fall as a result of China's severe Covid restrictions.
"Into 2023, the immediate focus will be on growth. On one hand, global growth is slowing...but on the other, China's reopening brings hopes," said Christopher Wong, a Currency Strategist at OCBC, according to Reuters.
"The issue is whether the rapid reopening (in China) triggers fresh waves in some countries or regions, and that may lead to fresh restrictions. This would undermine sentiment in the near term," he added.