Home / News / India /  Rupee may remain under pressure in 2023, likely to hit as low as 85 against dollar

Indian rupee is expected to remain under pressure in 2023, moving between 84 to even hit as low as 85 mark against the US dollar. The rupee is currently around 81.7 against the US currency. However, the local currency weakened significantly by over 10% against the greenback so far in the current year due to macroeconomic uncertainties.

In a panel discussion at the SBI Banking & Economic Conclave on Thursday, Deepak Mishra, the chief executive at the economic think-tank ICRIER, and Sajjid Chinoy, the chief economist at JP Morgan India have factored the rupee to hit a low of 85 and a high of 83 to the dollar next year, reported PTI.

Also, in the conclave, Rajeswari Sengupta, an associate professor at IGIDR, said that the Indian rupee is expected to trade at 84 to a dollar and even plummet to 85 in the second half of 2023, only if the RBI stops intervening in the money market.

Meanwhile, Soumya Kanti Ghosh, the group chief economic adviser at SBI has projected the domestic currency to be between 80-82 against the dollar next year --- which is far better than the current level.

This year, the rupee depreciated as the hawkish stance from Fed pushed the dollar to two-decade highs. Additionally, soaring crude oil prices, weakening in the Chinese yuan and foreign funds outflow also impacted the local unit. Since Russia's invasion of Ukraine in February 2022, the global economy faced energy crises, supply-chain disruption, and also inflationary pressure.

On Thursday, the rupee closed higher at 81.63 as the dollar index dropped against a basket of world currencies after FOMC minutes indicated a less hawkish stance going forward. Asian peers also picked up in the forex market.

In the latest case, Anindya Banerjee, VP - Of currency Derivatives & Interest Rate Derivatives at Kotak Securities said, " Rupee has been an underperformer over the last fortnight, primarily on account of demand for USD from OMCs and some bids from FPIs. However, weak USD and strong risk sentiments can continue to push USDINR lower, towards 81.25/30 levels. We expect an overall range of 81.25 and 81.85 on spot."

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