Mumbai: Rupee fell 39 paise to close at an all-time low of 95.23 against the US dollar Monday, as the ongoing Middle East tensions are causing volatility in global markets, keeping oil prices high and raising fears of inflation and economic slowdown.
Forex traders said Brent oil, hovering near USD 110 per barrel, is putting pressure on oil-importing economies like India.
At the interbank foreign exchange market, the rupee opened at 94.95 against the US dollar, then lost ground and finally settled for the day at its lowest-ever closing level of 95.23, registering a fall of 39 paise over its previous close.
On Thursday, the rupee had settled at 94.84 against the American currency. The Indian currency recorded its previous lowest closing level of 94.88 April 29.
Stock exchanges and currency markets were closed Friday on account of Maharashtra Day.
“The Indian rupee has hit a record low as the dollar recovered and crude oil prices held firm. This ongoing surge in oil prices, combined with foreign fund outflows, is putting a visible strain on India’s trade balance and broader economy.
“Persistent dollar demand is expected to keep the pressure on the rupee in the short term, driving the USD/INR higher toward the 95.35 and 95.70 levels,” said Dilip Parmar, Senior Research Analyst, HDFC Securities.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 98.26, up 0.11 per cent.
Brent crude, the global oil benchmark, was trading higher by 1.37 per cent at USD 109.65 per barrel in futures trade.
Investors’ focus was on counting of votes for the West Bengal state elections, IFA Global said in a research note, adding, “a BJP victory would be positive for domestic assets. However, the impact is likely to be short-lived as global geopolitics will continue to be the driving factor given direct impact on supply chains and industry.”
On the domestic equity market front, Sensex rallied 355.90 points to settle at 77,269.40, while Nifty climbed 121.75 points to 24,119.30.
Foreign Institutional Investors purchased equities worth Rs 2,835.62 crore Monday, according to exchange data.
Meanwhile, Expenditure Secretary V Vualnam on Friday said the upcoming few quarters and the coming year would possibly have a “lot of stress points”.
“The fiscal stress is indeed very much a reality, but at the same time… the capex would really be a priority item, which we would like to preserve and ensure that it continues at the budgeted level,” Vualnam said at the ICPP Growth Conference organised by the Ashoka University.
Comments are closed.