The rupee on Thursday slumped 39 paise to close at more than six-week low of 70.25 against the US dollar, reported news agency Press Trust of India (PTI). Rising crude oil prices and a late sell-off in domestic equity markets led to the fall in the domestic currency, analysts were quoted as saying in the PTI report. Besides, a strengthening dollar against some major currencies overseas also weighed on the home unit, they said. The rupee on Wednesday had declined 24 paise to close at 69.86.
Here are 5 things to know:
- At the forex market, the rupee opened sharply lower at 70.06 and fell further to the day’s low of 70.27 as crude oil prices breached the $75 per barrel mark for the first time in 2019.
- The domestic currency settled lower by 39 paise or 0.56 per cent at 70.25 per dollar, the lowest closing level since March 6, according to PTI.
- According to VK Sharma, head, PCG & Capital Markets Strategy, HDFC Securities, rising crude and dollar index weighed on the rupee.
- The dollar index, which gauges the greenback’s strength against a basket of six currencies, was up by 0.08 per cent to 98.25.
- “Stronger crude oil prices, weakness in Asian currencies also weighed on rupee,” said Mr Sharma.
- Global benchmark Brent breached the $75 per barrel level for the first time in 2019 following stricter US sanctions on Iran oil.
- A 10 per cent spike in crude prices can result in a 0.40 per cent widening of the CAD, which could result into a 3-4 per cent depreciation in the rupee and also push up inflation by 0.24 per cent, Mr Sharma pointed out.
- Saudi Arabia’s comments that it sees no immediate need for intervention in the oil market fuelled the rally even as the US data showed larger-than-expected increase in oil stockpiles.
- The BSE Sensex closed at 38,730.86, down by 323.82 points, or 0.83 per cent and the NSE Nifty dropped 84.35 points to settle at 11,641.80.
- Foreign institutional investors (FIIs) purchased equities worth Rs. 974.88 crore on Wednesday, while domestic institutional investors (DIIs) sold shares to the tune of Rs. 657.06 crore, according to provisional data from the NSE.
(With agency inputs)
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