 "Indian rupee")
The Indian rupee ended the final week of a turbulent year in the green on Friday, as the dollar index declined, while hopes that the country's current account deficit had likely peaked for the time being provided some support.
The rupee closed up 0.09% at 82.72 per dollar, continuing its rangebound movement for another session. With marginal gains this week, it rose for the first week in four.
However, the rupee declined 10.14% on the year, its biggest loss since 2013, making it the second worst-performing Asian currency. The dollar's mighty gains, on the back of the U.S.
Federal Reserve's monetary policy tightening, battered global currencies in 2022.
For the near term, there is some positivity in the market with China's reopening, and if the virus wave manages to subside, activity could bounce back strongly there, said Anindya Banerjee, head of research - FX and interest rates at Kotak Securities.
Combined with "the fact that stock markets have had a rough December, there is a scope for a hope-rally in January. If that materialises, then a soft dollar may be on the anvil and that can pressure prices downward for USD/INR." Traders and analysts expected the rupee's range to be 81.50-83.50 over the next three months. In October, the currency hit a record low of 83.29.
On Friday, Asian shares and currencies mostly rose after U.S. jobs data showed the Fed's rate hikes were dampening inflationary pressures.
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The dollar index fell to 103.860, but was headed for its biggest yearly gain since 2015.
Also helping the rupee was economists predicting that the worst of India's current account deficit (CAD) woes could be behind us for the time being after it hit a record in the September quarter in absolute terms.
"We expect the CAD to materially drop in the coming quarters, driven by falling prices for energy and other commodity imports, despite likely softer exports into 2023," Barclays economists wrote in a note.
"For fiscal 2024, we reduce our current account deficit forecast to $95 billion (~2.6% of GDP) from $105 billion earlier."
(Reporting by Anushka Trivedi in Mumbai, Editing by Eileen Soreng)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
