Year-Ender 2022: Will Indian Rupee heave sigh of relief after massive depreciation this year? Analysts decode factors for fall

The Indian Rupee has depreciated nearly 10 percent this year so far, breaching the key sentiment level of 82 against the US dollar for the first time in history. Several analysts believe despite the crack, the domestic currency is in a better position than foreign currencies when compared to the dollar.

According to analysts, the Indian currency’s depreciation is mainly due to the stronger dollar, which is taking support from incessant rate hikes by the US Fed Reserve to curb soaring inflation. Besides, other factors such as foreign institutional investors’ outflows also impacted the Rupee’s momentum.

The rupee has been depreciating for the last five years, however, 2022 was the worst among the last five — in 2021 rupee slid around 1.5 percent, while in 2020 and 2019, it was down around 2 percent each, and, in 2018, it weakened over 8.5 percent. The local currency hit a low of 83.29 against the US dollar on October 20, this year.

Source: zeebiz

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