Rupee Closes FY22 With Loss Of Nearly 4%; The fall of the Ukrainian War

Rupee Closes FY22 With Loss Of Over 3.5%; The Fall Of The Ukrainian War

The energy-sensitive rupee closed the 2021-22 financial year with a loss of nearly 4 percent, tracking a general surge in crude oil prices from the ongoing Russia-Ukraine war.

While the rupee rose to close at 75.67 against the dollar on Thursday, tracking a sharp fall in oil prices, it ended fiscal year 2021-22 with a loss of about 3.61 percent.

“On Thursday, the rupee rose 14 paise to 75.76 (temporarily) against the US dollar, tracking strong Asian rivals and falling global crude oil prices. The rupee depreciated by 264 paise, or 3.61 per cent, against the American currency during fiscal year 2021-22,” said Kshitij Purohit, International and Commodity Leader at CapitalVia Global Research.

The Indian currency had the most significant impact of the Russo-Ukrainian war, as it imported 85 percent of its oil needs.

And concerns of a widening current account deficit were confirmed on Thursday when data showed India’s current account balance widened to its highest level in nearly a decade as the country’s trade gap widened and foreign investment fell.

The broadest measure of the country’s foreign trade and services flows, the current account was in a deficit of $ 23 billion, or 2.7 per cent of gross domestic product, in the October-December quarter, according to the Reserve Bank of India (RBI) on Thursday.

The data is for a period that does not reflect import bills that soared from a sharp rise in crude oil prices to a multi-decade high following supply concerns from the escalating Russia-Ukraine war.

Still, the rupee’s appeal is underscored by a statement from the International Monetary Fund that India has received a record number of foreign direct investments in recent years despite the COVID-19 crisis and has some protections to mitigate risks from capital flows.

The RBI forex coffin of over $ 600 billion is one such protection.

The latest stock exchange data showed foreign institutional investors (FII) remained net buyers in the capital market on Wednesday when they bought shares worth ₹ 1,357.47 crore.

The interbank forex market closes on Friday for the closing of the bank’s annual accounts when the financial year ends on March 31.


Welcome to India's Largest news platform, I assure you that we daily update on Global news which helps you to grow your knowledge.

Related Articles

Leave a Reply

Your email address will not be published.

Back to top button