Rupee falls 18 paise to close at 71.78 amid crude worries hurt investors' sentiment

The Indian rupee on Tuesday weakened by another 18 paise to settle at 71.78 against the US dollar as investors fretted over higher crude oil prices

Press Trust of India September 17, 2019 18:55:43 IST
Rupee falls 18 paise to close at 71.78 amid crude worries hurt investors' sentiment
  • At the Interbank Foreign Exchange, the rupee opened at 71.83 then lost further ground and fell to an intra-day low of 71.98 against the US dollar

  • The local unit finally settled for the day at 71.78, down 18 paise over its previous closing

  • The Indian rupee on Monday had plunged by 68 paise to 71.60 against the US dollar amid concerns over soaring crude prices following drone attacks on Saudi Arabia's oil facilities

Mumbai: The Indian rupee on Tuesday weakened by another 18 paise to settle at 71.78 against the US dollar as investors fretted over higher crude oil prices.

Elevated crude oil prices have emerged as major fears for India -- the world's third-largest oil importer -- in form of fiscal slippage and inflationary pressure.

At the Interbank Foreign Exchange, the rupee opened at 71.83 then lost further ground and fell to an intra-day low of 71.98 against the US dollar.

The local unit finally settled for the day at 71.78, down 18 paise over its previous closing.

The Indian rupee on Monday had plunged by 68 paise to 71.60 against the US dollar amid concerns over soaring crude prices following drone attacks on Saudi Arabia's oil facilities.

Rupee falls 18 paise to close at 7178 amid crude worries hurt investors sentiment

Representational image. Reuters

"Indian currency spot surged to 71.98, Brent crude prices moved to $69 and the 10-year yield was at 6.72. All these factors are dampening the economy and will be difficult to tackle in the short term," said Shrikant S Chouhan, Senior Vice-President, Equity Technical Research, Kotak Securities.

Crude oil benchmark, Brent Futures, surged by almost 20 percent to $71.95 per barrel (intra-day) on Monday after twin drone attacks on Saturday wiped out more than half of Saudi Arabia's crude supply.

However, Brent Futures on Tuesday saw some moderation and was trading at $68.07 per barrel, down 1.38 percent over the previous close.

"Given India's dependence on imported oil, any spike in crude oil prices would impact India's oil import bill and trade deficit. Every dollar increase in the price of oil raises the import bill by around approx. $1.5 billion on an annual basis," said Arun Thukral, MD & CEO, Axis Securities.

Besides, heavy selling in the domestic equity market and sustained foreign fund outflows also weighed on the domestic currency, forex traders said.

The 30-share index ended 642.22 points, or 1.73 percent, lower at 36,481.09. The broader NSE Nifty too settled 185.90 points, or 1.69 percent, down at 10,817.60.

Adding to woes, foreign investors continued with their equity selling spree in the Indian market. Foreign institutional investors (FIIs) sold equities worth Rs 808.29 crore on Tuesday, exchange data showed.

The 10-year government bond yield was at 6.73 percent on Tuesday.

Market participants were also on edge awaiting cues from the upcoming trade talks between China and the US as well as a much-anticipated policy meeting of the Federal Reserve, scheduled to begin later in the day.

Meanwhile, on the global front, a Chinese vice finance minister will visit the United States on Wednesday to lay the groundwork for trade talks next month.

The official Xinhua news agency said vice finance minister Liao Min will lead a delegation visiting the United States on Wednesday to "pave the way" for the higher-level talks.

The dollar index, which gauges the greenback's strength against a basket of six currencies, rose by 0.01 percent to 98.61.

The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 71.5362 and for rupee/euro at 79.1934. The reference rate for rupee/British pound was fixed at 89.1393 and for rupee/100 Japanese yen at 66.34.

Updated Date:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

Rupee reverses gains to close nearly flat at 71.71; rising crude oil prices, foreign fund outflows weigh on currency
Business

Rupee reverses gains to close nearly flat at 71.71; rising crude oil prices, foreign fund outflows weigh on currency

The rupee pared initial gains to settle almost flat at 71.71 against the US dollar on Monday as rising crude oil prices kept investors edgy

Rupee tumbles 68 paise to close at 71.60 amid concerns over soaring crude oil prices
Business

Rupee tumbles 68 paise to close at 71.60 amid concerns over soaring crude oil prices

Logging its first fall in eight sessions, the Indian rupee on Monday plunged by 68 paise to 71.60 against the US dollar amid concerns over soaring crude prices following drone attacks on Saudi Arabia's oil facilities

Rupee recoups day's losses, settles 12 paise higher to close at 71.70 amid further escalation in US-Iran tensions
Business

Rupee recoups day's losses, settles 12 paise higher to close at 71.70 amid further escalation in US-Iran tensions

The Indian rupee retrieved early losses to settle 12 paise higher at 71.70 against the US dollar, but overall forex market sentiments remained subdued amid further escalation in US-Iran tensions