New York: Moody’s Ratings revealed on January 23 that the Indian rupee has depreciated by approximately 5% over the past two years and over 20% since January 2020, making it one of the weakest-performing currencies in South and Southeast Asia. The report highlights the challenges faced by the Indian economy amidst the rupee’s prolonged decline.
Of the 23 rated Indian companies assessed by Moody’s, only six were found to be significantly exposed to the impact of a strong US dollar. These include Bharat Petroleum Corporation (BPCL), Hindustan Petroleum Corporation (HPCL), Indian Oil Corporation (IOCL), UltraTech Cement, Bharti Airtel, and ANI Technologies (Ola). Despite this exposure, the companies reportedly have adequate mitigation strategies in place to weather currency-related challenges.
“While the rupee has depreciated by around 5% in the last two years, the 20% decline since 2020 highlights its vulnerability within the region,” Moody’s stated in its report on corporate performance in South and Southeast Asia’s emerging markets.
The depreciation poses concerns for India’s oil sector, heavily reliant on imports, and companies with high foreign currency debt. However, mitigating factors such as hedging policies and diversified revenue streams have helped cushion the impact for exposed firms.
