Rupee Hits Record Low: USD Nears 94 Amid Oil Surge

Mumbai, Mar 23 (PTI) The rupee continued its slide in the early trade on Monday, losing 41 paise to slump to a record low of 93.94 against the US dollar as the raging war in West Asia kept global crude oil prices elevated, and the greenback remained strong.

Sustained foreign fund outflows and a crash at the domestic equity markets in the morning session further weakened the local unit, forex traders said.

At the interbank foreign exchange, the local unit opened at 93.84 against the US dollar before sliding further to its record low of 93.94, down 41 paise from its previous close.

The rupee went past 93 against the greenback for the first time on Friday and crashed 64 paise to eventually settle at an all-time low of 93.53.

"The fall in rupee was very big considering that India is now paying USD 50 more on crude it imports from the Gulf per barrel. The Reserve Bank of India (RBI) was present at various levels but it only allowed the rupee to fall as demand for dollars was very high," Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.


"Expectation is that the RBI may step in to control further depreciation but the demand from oil and FPIs will continue to remain high," Bhansali said.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.02 per cent higher at 99.66.

Brent crude, the global oil benchmark, was trading 0.60 per cent lower at USD 112.90 per barrel in futures trade.

On the domestic equity market front, the Sensex slumped 1,306.27 points, or 1.75 per cent, to 73,226.69, while Nifty was down 418.25 points, or 1.81 per cent, to 22,696.25.

Foreign institutional investors sold equities worth Rs 5,518.39 crore on a net basis on Friday, according to exchange data.

Meanwhile, India's forex reserves dropped USD 7.052 billion to USD 709.759 billion during the week ended March 13, the RBI said on Friday.