Rupee Crashes to Record Low Against US Dollar

Mumbai, Mar 20 (PTI) The rupee crashed 82 paise, or nearly 1 per cent, to settle at an all-time low of 93.71 (provisional) against the US dollar on Friday, weighed down by persistent foreign fund outflows and a steep rise in crude oil prices amid mounting geopolitical tensions.

Forex traders said the Indian rupee is under tremendous pressure as surging crude oil prices and a shift toward risk-aversion dented investor sentiments.

Moreover, heightened geopolitical uncertainty risks are driving energy costs higher, which could widen the trade deficit and stoke inflationary pressures, they added.

At the interbank foreign exchange, the local unit opened at 92.92 against the greenback and soon breached the 93-mark for the first time. It kept losing ground through the session and eventually settled at 93.71 (provisional), down 82 paise from its previous close.

On Wednesday, the rupee slumped 49 paise to close at its previous record low of 92.89 against the US dollar.

Forex markets were closed on Thursday on account of Gudhi Padwa.



"The rupee hit fresh all-time lows on Friday amid geopolitical tensions in West Asia and FII outflows. Rising global crude oil prices, too, have pressured the rupee," Anuj Choudhary, Research Analyst, Commodities Research, Mirae Asset Sharekhan, said.

All key central banks -- US Federal Reserve, ECB, Bank of England, and Bank of Japan -- left interest rates unchanged in their respective monetary policy meetings, citing inflation concerns and said they stand ready to steer monetary policy accordingly, he said.

"We expect the rupee to trade with a negative bias as escalating geopolitical tensions and rising crude oil prices may continue to pressure the rupee," he said, adding that the USD-INR spot price is expected to trade in a range of Rs 93.20-93.80.

The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.35 per cent higher at 99.58.

Brent crude, the global oil benchmark, was trading 1.84 per cent higher at USD 110.7 per barrel in futures trade.

On the domestic equity market front, the Sensex rebounded from Thursday's crash, and was up 325.72 points, or 0.44 per cent, to 74,532.96, while Nifty rose 112.35, or 0.49 per cent, to 23,114.50 points.

Foreign institutional investors sold equities worth Rs 7,558.19 crore on a net basis on Thursday, according to exchange data.