Latest : Rupee plummets 76 paise to 76.93/USD as oil soars

Rupee plummets 76 paise to 76.93/USD as oil soars

Sliding for the fourth straight session, the rupee tanked 76 paise to close at 76.93 on Monday, after touching its lifetime low of 77 against the US dollar, as crude oil prices climbed to multi-year highs amid the Russia-Ukraine crisis.

Global oil prices soared past USD 120 per barrel amid the US and European nations mulling a ban on Russian energy imports.

Rupee plummets 76 paise to 76.93 against US dollar as oil soars | Deccan Herald

Sustained foreign fund outflows and a lacklustre trend in domestic equities also weighed on investor sentiment, forex traders said.

At the interbank foreign exchange market, the rupee opened at 76.85 against the American currency and slumped to an all-time low of 77, before closing at 76.93, down 76 paise from the previous close.

“The Indian rupee has plummeted to a lifetime low against the US dollar as the deepening Russia-Ukraine conflict has sapped risk appetite in the market while prompting safe-haven flows into the US dollar,” said Sugandha Sachdeva, Vice President – Commodity and Currency Research, Religare Broking Ltd.

Forex: Rupee drops 11 paise to 70.93 on dollar demand - The Economic Times

Besides, the parabolic rise in crude oil prices towards multi-year highs and spiralling commodity prices are fuelling inflationary risks, which is a key headwind for the rupee-dollar exchange rate, Sachdeva added.

According to Sachdeva, the overall trend for the Indian rupee is skewed towards the downside and a convincing close below 77 “would pave the way for further downside towards 77.50 mark in near term, while we envisage the local currency to test the 79 mark from a medium-term perspective.”

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.46 per cent higher at 99.09.

Global oil benchmark Brent crude futures jumped 6.55 per cent to USD 125.85 per barrel.

Rupee Spurts 47 Paise To End At Nearly 2-week High Against Dollar As Oil Prices Ease - Inventiva

On the domestic equity market front, the 30-share Sensex ended 1,491.06 points or 2.74 per cent lower at 52,842.75, while the broader NSE Nifty plunged 382.20 points or 2.35 per cent to 15,863.15.

Foreign institutional investors remained net sellers in the capital market on Friday as they offloaded shares worth Rs 7,631.02 crore, according to stock exchange data.

“The Indian Rupee tumbled in Monday’s trade against the US Dollar after talks of a ban on Russian oil imports pushed oil prices to multi-year highs, amplifying fears of rising inflation and wider trade deficits,” said Sriram Iyer, Senior Research Analyst at Reliance Securities.

Most of the emerging market and Asian peers depreciated and along with weakness in the Asian and European equity markets and US Futures, Iyer noted.

According to Nish Bhatt, founder and CEO of investment consulting firm Millwood Kane International, a rise in crude oil price disturbs the fiscal deficit and puts pressure on the currency.

“As expected, the rupee has hit an all-time low level. The fall in currency indicates that the current crude prices may not fall in a hurry, we may witness elevated prices for some time to come,” Bhatt said.

As per Emkay Global Financial Services, global economies are facing a heightened risk of a recession this year as Russia’s invasion of Ukraine severely disrupts supply chains and has flared up commodity prices since the conflict began.

Brent crude oil prices have rallied and are trading at USD 125/barrel. Important metals like nickel, aluminium and copper have also rallied to hit all-time highs.

Despite surging prices, the US and European allies mull a Russian oil import ban. A boycott would put enormous pressure on the already tight supply side, it said, adding that the domestic markets will be watching out for the outcome of the state election results due to be released on March 10 in the respective countries.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button

Adblock Detected

Please consider supporting us by disabling your ad blocker