It is not that the rupee has weakened, but it is the US dollar that has strengthened. No matter how many tweets are written against that observation, it is a fact, the Economic Survey 2022-23 reiterated.
On a financial year basis, that is, from April to December 2022, the rupee has depreciated against dollar by 8.3 per cent.
Over the same period, the dollar has appreciated by 4.4 per cent in terms of the dollar index.
This holds even on a calendar year basis, that is, from January to December 2022, the rupee has depreciated by 10.8 per cent whereas the dollar has appreciated by 6.4 per cent.
The Nominal Effective Exchange Rate (NEER) of the US dollar (27 economies) appreciated by 7.8 per cent in the calendar year 2022, up to December, while the NEER of India (64 economies) depreciated by 4.8 per cent, the Survey said.
"Several other currencies depreciated even more value against the dollar than the rupee. Thus, the external value of rupee vis-a-vis the dollar has seen very orderly movements during the year since the onset of the current geopolitical crisis."
Further, the rupee appreciated against select major currencies barring the dollar. The average exchange rate of rupee against the pound sterling appreciated by 6.7 per cent in April-December 2022 over April-December 2021. This rate of appreciation was 14.5 per cent with respect to the Japanese Yen and 6.4 per cent against the Euro.
On a financial year basis, that is, between April and December 2022, the rupee depreciated 3.4 per cent and 4.0 per cent measured in terms of 6-currency and 40-currency tradeweighted indices, respectively. "Thus, even in real terms, the rupee witnessed modest depreciation in the face of global spill overs," the Survey suggested.