Till recently, the rupee was recording fresh lows every other day. Persistent foreign portfolio outflows and a widening trade deficit are largely blamed. While the import bill balloons, the falling rupee has not helped boost exports either.
Taking a hit
Several currencies have taken a beating in the wake of a long-drawn war in Ukraine and the steep hike in interest rates by the U.S. Fed to rein in inflation. The rupee slid past the 80 mark earlier this month and has weakened by about 7.5% so far in 2022. Historically strong currencies such as the pound and the euro have also depreciated by more than 11%. Several Asian currencies such as the Korean won, the Philippine peso, and the Thai baht have weakened by more than 10% this year. Meanwhile, the dollar index, which gauges the greenback’s strength against six major currencies, rose to a 20-year high.
