The rupee has remained one of the least volatile Asian currencies in 2022 as well as 2023 so far, RBI Governor Shakitkanta Das said on Wednesday, announcing the outcome of the central bank's first policy review of the current year. The RBI's Monetary Policy Committee — led by Governor Das — decided to raise the repo rate by 25 basis points to 6.5 per cent, marking a sixth straight increase in the current cycle of post-pandemic interest rates.

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The depreciation and the volatility of the rupee in the current phase of multiple shocks is far lower than during the global financial crisis and the taper tantrum, he said. "In a
fundamental sense, the movements of the rupee reflect the resilience of the Indian economy," the RBI Governor added.  

The February 8 policy action takes the total upwards revision in the repo rate — the key interest rate at which the RBI lends money to commercial banks — to a total of 250 basis points in six installments since Mar 2022.

Watch: Anil Singhvi's analysis on RBI policy

Das said that the relatively lower volatility in the rupee among Asian currencies "limits the impact of imported price pressures and other global spillovers".

The rupee depreciated nearly 10 per cent in 2022, hitting the 82 mark against the US dollar for the first time ever. Many analysts said the rupee was in a better position than its peers during the course of the year.

Also Read: RBI projects economic growth at 6.4% for next financial year

The RBI Governor said considerable uncertainties remain on the likely trajectory of global commodity prices, including crude oil. The MPC brought down its consumer inflation projection for the year ending March 2023 by 20 basis points to 6.5 per cent, assuming an average crude oil rate of $95 a barrel. 

India meets the lion's share of its oil requirement through imports. Higher crude oil prices widen India's current account deficit and in turn weighs on the rupee.

Where is rupee headed vs US dollar?

The rupee is likely to face a hurdle near 82.60/83.00 levels and may appreciate once again towards 81.40 amid softening of crude oil price and expected weakness in the dollar index, according to Raj Deepak Singh, Currency Analyst at ICICI Direct.

Sunil Damania, Chief Investment officer, MarketsMojo believes that in the next monetary policy, RBI may take the decision of another rate hike to keep the Indian Rupee stable.

Also Read: UPI payment for foreign travellers to India allowed by RBI

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