Rupee slips 13 paise to 71.93 on higher crude oil prices after escalation of US-Iran tensions

  • At the interbank foreign exchange, the rupee opened weak at 72.03 against the US dollar

  • During the day, the domestic unit touched a low of 72.11

  • This is the third straight session of loss for the domestic currency, during which it has lost 71 paise

Mumbai: The rupee plunged 13 paise to settle at 71.93 against the US currency on Monday, weighed down by the spike in global crude oil prices as escalating US-Iran tensions fanned fresh fears of conflict in the Middle East.

Forex traders said growing geopolitical tensions could continue to keep the domestic unit under pressure.

At the interbank foreign exchange, the rupee opened weak at 72.03 against the US dollar. During the day, the domestic unit touched a low of 72.11.

The local unit recovered some lost ground and finally closed at 71.93 against the US dollar, lower by 13 paise over its previous closing.

The rupee on Friday had closed at 71.80 against the US dollar.

 Rupee slips 13 paise to 71.93 on higher crude oil prices after escalation of US-Iran tensions

Representational image. Reuters.

This is the third straight session of loss for the domestic currency, during which it has lost 71 paise.

Meanwhile, Brent futures, the global oil benchmark, rose 1.49 percent to $69.62 per barrel.

"The renewed geopolitical worries will remain for a couple of days, lending support to oil prices and taking a toll on the emerging market currencies including rupee," said Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services.

US President Donald Trump has warned Iran of "major retaliation" if Tehran carries out any attack against America to avenge the killing of top military commander Qasem Soleimani and hinted at striking its cultural sites.

His statement came hours after Iran announced it will no longer abide by the limits contained in the 2015 landmark nuclear deal.

"Most Asian markets also fell after news of the air strikes. Market participants are awaiting for more clarity on the same but escalation in geopolitical tensions could continue to keep the currency weighed down," said Gaurang Somaiyaa, Forex & Bullion Analyst, Motilal Oswal Financial Services.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell by 0.28 percent to 96.56.

On the domestic equity market front, the 30-share BSE index ended at 40,676.63, dropping of 787.98 points, or 1.90 percent. Similarly, the broader Nifty closed at 11,993.05, falling by 233.60 points, or 1.91 percent.

Foreign institutional investors (FIIs) had bought equities worth Rs 1,263.05 crore on a net basis on Friday, according to provisional exchange data.

The 10-year government bond yield was at 6.57 percent.

The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 71.6949 and for rupee/euro at 80.0507. The reference rate for rupee/British pound was fixed at 93.9891 and for rupee/100 Japanese yen at 66.32.

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.

Updated Date: Jan 06, 2020 19:37:56 IST