Rupee drops 32 paise to close at 2-week low of 69.67

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Published: April 23, 2019 2:25 AM

rupee, economy, dollar, oilBrent oil prices on Monday traded $73.7 per barrel, the highest level in the past six months.

The rupee on Monday plunged by 32 paise to close at a two-week low of 69.67 against the US dollar following an increase in crude oil prices amid reports that the US will end waivers on Iranian oil imports. The rupee closed at the lowest levels against the greenback since April 8.

The rupee has depreciated by nearly 75 paise over the last five trading sessions – from Rs 69.17 on April 12 to close at Rs 69.67 on Monday – which has been in line with the rise in global crude oil prices.

Brent oil prices on Monday traded $73.7 per barrel, the highest level in the past six months. “The fall in the rupee is a reaction to an increase in crude prices as there is uncertainty arising out of the United States ending waivers on Iranian oil imports,” said Ashutosh Khajuria, V-P, Federal Bank.

Indian bond and rupee markets could be facing a bearish sentiment on account of rising crude oil prices amid growing concerns of over supply from the Organization of Petroleum Exporting Countries (Opec) and sanctions by the United States on oil producing nations like Venezuela and Libya. “Due to the added pressure on the fiscal deficit on account of Brent crude prices crossing $70 bbl, the bond and rupee markets will face some bearish sentiments,” added Khajuria

The most traded bond – 7.17% yielding paper maturing in 2028 – closed Monday’s session at 7.62%, six basis points higher than the previous close on Thursday. Foreign portfolio investors (FPIs) have pulled out close to $1.1 billion from Indian debt markets as on April 16, while they invested close to $830 million in Indian equities. The dollar index – measures the dollar against six currencies – fell by 0.03% at 97.35 from the previous close on Friday.

Among other major Asian currencies, the rupee fell the most on Monday after the Turkish Lira and the Indonesian Rupiah, which fell 0.35% and 0.23% respectively, from its previous close.

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