Mumbai: Rupee slumped 69 paise to an all-time low of 92.18 against the US dollar in early trade on Wednesday, March 4, as a sharp spike in crude oil prices amid geopolitical tensions following the escalation of the US–Iran conflict weighed on investor sentiment.
Forex traders said the domestic currency is under severe pressure due to a sharp spike in crude oil prices, with Brent Crude crossing the USD 82 per barrel level in futures trade in the wake of the Iran crisis, which dented investor sentiments.
At the interbank foreign exchange market, the rupee opened at 92.05, then fell to an early low of 92.18 against the American currency, registering a fall of 69 paise from its previous close.
On Monday, the rupee had settled at 91.49 against the US dollar.
The forex Market was closed on Tuesday on account of Holi.
Traders said the USD/INR pair remains under pressure as investors are moving toward safe-haven assets. Moreover, persistent foreign capital outflow from the equities, and fears grow that expensive imports will hurt the trade balance.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.03 per cent higher at 99.08.
Brent crude, the global oil benchmark, was up 1.01 per cent at USD 82.22 per barrel in futures trade, following the escalation of the US-Iran crisis.
Experts say that India faces the risk of a sharp increase in its import bill with the rising crude prices in the international market, as the country’s 85 per cent fuel requirement is met through imports.
On the domestic equity market front, the Sensex tumbled 1,671.39 points or 2.08 per cent to 78,567.46, while Nifty tanked 502.35 points or 2.02 per cent to 24,363. 35 in early trade.
On Monday, foreign institutional investors offloaded equities worth Rs 3,295.64 crore, according to exchange data.
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