The Indian rupee fell heavily against the US dollar in the morning trades on Monday breaking the 67 per dollar mark for the first time in last 15 months as US dollar went on to a 4-month high following a sharp appreciation in crude oil prices and the geopolitical tensions between the US and Iran.
The Indian rupee fell heavily against the US dollar in the mid-morning trades on Monday breaking the 67 per dollar mark for the first time in last 15 months as US dollar went on to a 4-month high following a sharp appreciation in crude oil prices and the geopolitical tensions between the United States and Iran. The rupee opened marginally higher against the US dollar but very quickly fell into losses cracking 67-level versus the US dollar. The domestic currency has been broadly on a declining trend since after the Union Budget 2018 has been passed followed by a steep plunge from the second week of April 2018 till now.
The Indian rupee at 15-month low vs the US dollar
The rupee crumbled as much as 26 paise against the US dollar to a 15-month low of 63.13 at the interbank foreign exchange market on Monday. This was the lowest level since 17 February 2017. Up until 12:15, Indian rupee shuttled between a range of 66.78 and 67.13 apiece US dollar on Monday. While, on the other hand, US dollar spiked to a four-month high level on Monday witnessing the reaction of the United States’ macroeconomic data released on Friday last week. The dollar index stood at 92.461, down 0.1% but still near Friday’s high of 92.908, which was its firmest level since late December, Reuters reported.
The Reserve Bank of India had fixed a reference rate of rupee at 66.7681 against the US dollar on Friday last week and 90.5843, 79.9682 and 61.1700 against the pound, euro and Japanese yen, respectively. “The Reserve Bank of India, which typically purchases and sells dollars through state-run banks covertly to intervene in the local spot market, was not seen so far, though some lenders were seen selling dollars, dealers said, adding that they were not sure whether that was the central bank or the banks themselves,” Reuters said in a report.
High crude oil prices
Meanwhile, US crude oil prices rose above $70 per barrel on Monday for the first time since November 2014 with Brent crude breaching to newer highs as the heightened economic crisis in Venezuela weighed on shedding oil supply. “The concerns added to worries over a looming decision on whether the United States will walk away from a deal with Iran and instead re-imposes sanctions on Tehran, keeping international oil markets on edge,” Reuters reported. Brent crude oil rose 1.06% to $75.59 per barrel, its highest since November 2014. US West Texas Intermediate (WTI) crude went up by 1.09% to $70.48 per barrel for the first time since November 2014 when WTI surpassed $70 per barrel level.