Rupee fell, by 33 paise to touch 72.96 against the US dollar today. The rupee was on course to close lower against the greenback for a third consecutive session.
A surge in crude oil prices to $81 a barrel past its 2014 highs along with strength in the dollar overseas battered the rupee, say analysts.
The rupee had closed at 72.63 against the American currency on Monday. It is down more than 13 per cent against the dollar so far this year.
Things to know:
1. Concerns on the current account deficit front on the back of soaring crude oil prices dragged the rupee lower.
2. Crude oil prices edged near four-year highs added to rupee’s worries. Brent crude oil futures nudged up 0.2 per cent to $81.32 a barrel , reported .
3. Crude oil prices edged higher above $81 a barrel levels, near a four-year high of $81.48 hit in the previous session. Looming US sanctions against Iran and unwillingness by the Organization of the Petroleum Exporting Countries (OPEC) to raise output pushed the crude oil prices higher.
4. High crude oil prices tend to widen the trade deficit, and the current account deficit. India meets more than 80 per cent of its oil demand through imports.
5. The rupee could continue to remain under pressure, say analysts.
6. “This may cause the Rupee to underperform its current account surplus emerging market counterparts… Cancellation of scheduled trade-related talks between US and Chinese officials has dampened risk sentiment,” said IFA Global, a forex advisory firm.
7. The government is due to meet top bankers on Tuesday.
8. The Reserve Bank of India has said the central bank and market regulator Sebi are watching market developments closely and would act if required.
9. The US central bank the Federal Reserve is set to begin its two-day policy meet later on Tuesday. Analysts will watch the central bank’s commentary on the world’s largest economy for direction in the currency markets.
10. Domestic equity markets starting in the red also added to rupee’s woes, traders said in a report. The S&P BSE Sensex traded at 36,116.13, with a loss of 188.89 points or 0.52 per cent and the broader Nifty was at 10,895.35, down 72.05 points or 0.66 per cent.>