Rupee crashes below record 73-mark, ends lower by 43 paise against US currency as oil prices spike

In the day trade, the rupee crashed to its all-time low of 73.42 per dollar as crude oil prices breached the $85 per barrel mark, leading to huge outflows of cash.

Press Trust of India October 03, 2018 18:54:10 IST
Rupee crashes below record 73-mark, ends lower by 43 paise against US currency as oil prices spike

Mumbai: The rupee on Wednesday plunged by 43 paise to breach the historic low of 73 level as soaring crude oil prices fuelled worries over capital outflows and widening current account deficit.

The domestic currency closed at a record low of 73.34, down by 43 paise or 0.59 percent at the interbank foreign exchange here.

In the day trade, the rupee crashed to its all-time low of 73.42 per dollar as crude oil prices breached the $85 per barrel mark, leading to huge outflows of cash.

Investors remained concerned over sustained foreign capital outflows and soaring crude oil prices, analysts said.

After breaching the US 85 per barrel level, the benchmark Brent crude stayed near four-year high levels at $84.86 per barrel.

Rupee crashes below record 73mark ends lower by 43 paise against US currency as oil prices spike

Representative image.

According to the provisional exchange data, foreign investors withdrew Rs 1,550 crore on a net basis from capital markets on Wednesday.

Rising US interest rates and bond yields have encouraged investors to pull out funds from emerging markets to pocket better returns, analysts said.

"The rupee has made a new record low today on the back of consistent rise in the crude oil prices. A sharp rise in crude oil along with steep depreciation in the rupee might push inflation higher in coming months," Rushabh Maru - Research Analyst, Anand Rathi Shares and Stock Brokers.

The Reserve Bank refused to open a special window for oil marketing companies which affected market sentiments, VK Sharma, Head Private Client Group & Capital Market Strategy at HDFC Securities.

Stocks also fell by more than 1.5 percent due to the rupee falling to record low levels. The benchmark BSE Sensex plunged by 550 points or 1.51 percent while the broader Nifty tanked 150 points or 1.38 percent.

The rupee opened lower at 73.26 per dollar due to high crude oil prices against the last close of 72.91 per dollar. The currency pared some losses to touch a high of 72.90 per dollar on market speculation that RBI may open special dollar window for oil companies.

However, without any clear signals from the central bank, the rupee crashed to all-time lows before settling at 73.34.

Meanwhile, the FBIL set the reference rate for the dollar at 73.02 per dollar. The reference rate for euro was fixed at 84.57 against 84.37 previously and for the British pound at 94.98 against 94.88 on October 1.

Updated Date:

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