"Given the scenarios and given our relatively better GDP growth, we expect rupee to be far less under pressure than it was in 2022,” V Anantha Nageswaran told Reuters in an interview, adding 2023/24 should be a “less eventful” year for the local currency. In 2022, the rupee declined 10.14% on the year, its biggest loss since 2013, making it the second worst-performing Asian currency as the U.S. Federal Reserve's aggressive rate hikes battered emerging market currencies and boosted the dollar.
But recessionary fears in western economies are expected to
lead to a dovish stance from the Fed in 2023, helping other
currencies to stabilise against the dollar.
Last month, the International Monetary Fund said global
growth in 2024 would accelerate slightly to 3.1%, a tenth of a
percentage point below the agency’s October forecast, as the
full impact of steeper central bank interest rate hikes slows
demand globally.
Meanwhile, India in its annual Economic Survey forecast
economic growth of 6% to 6.8% in the 2023/24 fiscal year,
slowing from the 7% growth projected for the current year ending
March 31, as a global slowdown might hurt exports.
The report, prepared by Nageswaran, said its baseline
scenario was for 6.5% growth in 2023/24, which would make India
one of the fastest growing economies.
Nageswaran said India’s scheme to offer production-linked
incentives to local manufacturers will boost export capacities.
(Writing by Aftab Ahmed; Editing by Emelia Sithole-Matarise)
