Rupee tumbles 68 paise to 71.60 in early trade on sharp rise in crude prices; foreign fund outflow weighs on local currency

Mumbai: The rupee tumbled by 68 paise to 71.60 against the US currency in early trade on Monday, as a sharp jump in global crude oil prices dampened investor sentiments.

Forex traders said market participants were concerned as the drone attack on Saudi Arabia’s oil facilities has stroked fiscal slippage concerns. Crude oil prices witnessed a sharp spike after a weekend drone attack on Saudi Arabia cut into global energy supplies and halved the kingdom’s oil production. Saturday’s explosions set off fires that engulfed the Abqaiq plant, the world’s largest oil processing facility, and nearby Khurais, which hosts a massive oil field. [caption id=“attachment_5114261” align=“alignleft” width=“380”] Representational image. Reuters.[/caption] Brent crude futures, the global oil benchmark, jumped 9.86 percent to $66.16 per barrel on Monday. At the interbank foreign exchange, the rupee opened at 71.54 then fell to 71.60 against the US dollar, showing a decline of 68 paise over its previous closing. The Indian rupee on Friday had closed at 70.92 against the US dollar. Traders said weak opening in domestic equities and sustained foreign fund outflows also weighed on the domestic currency. The 30-share index was trading 204.37 points or 0.55 percent lower at 37,180.62 and the broader Nifty fell 64.10 points or 0.58 percent to 11,011.80. Foreign institutional investors (FIIs) remained net sellers in the capital market, pulling out Rs 405.45 crore on Friday, provisional data with the exchanges showed. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.09 percent to 98.17. The 10-year government bond yield was at 6.64 percent in morning trade.