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Rupee tumbles 22 paise against dollar on rising global crude prices, fresh demand for greenbacks

Mumbai: The rupee on Thursday slumped 22 paise to 70.08 against the US dollar in early trade on rising global crude prices and fresh demand for the American currency from importers.

However, the dollar's weakness against some currencies overseas and a higher opening of the domestic equity markets capped the rupee's losses, forex dealer said.

Fresh dollar demand from banks and importers weighed on the Indian currency, they added.

At the Interbank Foreign Exchange (forex) market, the rupee opened on a weaker note at 70.06 against the US dollar, and further fell to quote at 70.08, a decline of 22 paise over its previous close.

 Rupee tumbles 22 paise against dollar on rising global crude prices, fresh demand for greenbacks

FP photo.

The rupee on Wednesday had declined by 24 paise to close at 69.86 against the greenback.

Global benchmark Brent crude advanced by 0.04 percent to $ 74.60 per barrel. Crude prices continue to remain at elevated level that negatively affects the domestic currency.

A possible increase in fuel prices due to the US sanctions on Iranian crude exports can have adverse impacts on the current account deficit (CAD), the rupee and inflation, according a Care Ratings report.

A 10 percent spike in crude prices can result in a 0.40 percent widening of the CAD, which can consequently play out into a 3-4 percent depreciation in the rupee and also push up inflation by 0.24 percent, the ratings agency has said.

The dollar index, which gauges the greenback's strength against a basket of six currencies, edged lower by 0.15 percent to 98.02.

Meanwhile, equity benchmark BSE Sensex was trading 42.83 points or 0.11 percent higher at 39,097.51, and the NSE Nifty rose 22.95 points or 0.20 percent to 11,749.10.

Foreign institutional investors emerged as net buyers in the capital markets, putting in Rs 974.88 crore Wednesday, according to the provisional data.

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Updated Date: Apr 25, 2019 10:35:45 IST