After a torrid 2022, Indian rupee seeks some reprieve as economy stays resilient

[NEW DELHI] The Indian rupee had a year to forget in 2022, as it fell 11.4 per cent against the US dollar – the sharpest decline since 2013 – to become one of the worst-performing currencies in Asia.

While the country’s strong foreign reserves offered some cushion, it was the hawkish US Federal Reserve’s string of interest rate hikes that lifted the greenback against the currencies of both developed and emerging economies, including India.

What hurt the rupee more than its Asian peers was India’s heavy dependence on energy imports. India, the third-largest economy in Asia, imports nearly 80 per cent of its crude oil requirements. And while India’s exports are rising, it still runs a currency account deficit that is bridged through foreign direct investment flows.