The rupee may further fall and plunge to new depths and hit a new low as Dollar consolidates its position after recent round of correction. . The US Dollar has stabilised in recent months following a severe decline in November, and a slowing global economy and deteriorating risk sentiment will help the currency perform well in the first half of 2023.
Rupee might slip to 85 to a dollar by June, revive to 80 by year-end
Further, if global growth slows and risk appetite remains fragile over the upcoming quarters, the dollar will gain ground against the majority of foreign currencies. The rupee is predicted by analysts’ research to trade at 83 to the dollar by the end of this month, then decline to 84 at the end of March 2023 and 85 by the end of June.
However, the Indian currency is likely to revive in the second half of 2023 to close the year at 80 to the dollar and rise further to 78 by the end of 2024.
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Slowing global growth and a widening Current Account Deficit hurt’s currencies world over
The US financial tightening and financial market volatility have taken a toll on the currencies of the most developed and emerging markets, which has also had a negative effect on the Indian Rupee. Currencies will be affected by slowing global growth and a growing current account deficit.
The Reserve Bank of India has said that it will keep implementing measures to reduce currency rate market volatility. Further, the RBI has emphasised that it is devoted to the orderly evolution of exchange rates and that the Indian Rupee’s history is one of tenacity and stability.
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