Worst year for rupee since 2013 despite surpassing Turkish lira, UK pound

RBI's intervention caused foreign reserves to decline by $70 billion in 2022, lowest in at least 22 years; worst show by bonds since 2009 on sustained repo rate hike

The rupee depreciated over 10 per cent in 2022 against the dollar — its worst performance since 2013 — the year of taper tantrum. The Indian unit, however, fared better than some other global currencies like Turkish Lira and British Pound.

The pressure on rupee prompted the Reserve Bank of India to aggressively intervene in the foreign exchange market, resulting in foreign reserves declining $70 billion in 2022 — the worst decline at least in the past 22 years. In the week ended December 23, forex reserves dropped by $691 million to $562.808 billion, making it the second conse­cutive week of decline in the kitty, according to the RBI data. 

The yield on the 10-year benchmark government bond climbed 87 basis points (bps) in the year on the back of sharp rate increase by the Reserve Bank of India, by 225 bps to 6.25 per cent since May this year. This was the steepest rise in the 10-year yield since 2009 — the year after the global financial crisis.