Rupee slides by 37 paise to 15-month low of 75.36 against dollar as crude oil spikes

Mumbai: The rupee slid by 37 paise to close at a 15-month low of 75.36 against the US dollar on Monday as crude oil zoomed towards seven-year high and the greenback hardened in the overseas markets.
The Indian currency for the first time this year settled below the 75 level as fears of high import bill due to costlier crude oil and forex outflows due to firming US bond yields weighed on the local unit. The rupee had fallen by 20 paise to end at 74.99 on Friday.
“The rupee traded weak again, as Black Gold keeps riding north, touching USD 84.20 and inching closer to USD 85.00 per barrel. Going ahead the rupee can be in the range of 75.00-75.60,” said Jateen Trivedi, Senior Research Analyst at LKP Securities.
At the interbank foreign exchange market, the local currency opened lower at 75.11 and witnessed an intra-day high of 75.06 and a low of 75.39 against the US dollar in day trade.
The local unit finally settled down by 37 paise at 75.36 a dollar, a level not seen since July 14, 2020, even as the domestic equity market touched record levels.
Brent crude futures, the global oil benchmark, advanced 2.08 per cent to USD 84.10 per barrel as oil producers restrained supplies and leading energy consumers India and China grappled with energy crisis.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.23 per cent higher at 94.28.
“The Indian rupee continued bearish momentum on the back of a stronger dollar, following higher US Treasuries, and a surge in crude oil prices,” said Dilip Parmar, Research Analyst, HDFC Securities.
Parmar further said that even after a better risk-on sentiments market with domestic benchmark index at all-time high, rupee is driven by the rising dollar and crude oil prices. The absence of central bank intervention is also weighing on the rupee.
“The Indian rupee drifted lower in Monday’s trade amid the steep rise in crude oil prices and strength in the greenback against other major currencies,” said Sugandha Sachdeva, Vice President – Commodity and Currency Research, Religare Broking.
US crude prices have continued to firm up zooming towards seven-year highs, amid post-pandemic boom and supply bottlenecks. Besides, a sharp advance in natural gas and coal prices is prompting a switch from these fuels to crude oil, ahead of the winter heating season.

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