₹dives to 1-week low of 67.50 on oil scare, capital outflows
Mumbai: The rupee on Friday plunged by 38 paise or 0.57 per cent to close at a fresh one-week low of 67.50 against the US currency amid worries over rising global crude prices and capital outflows. Sustained demand for the greenback from state-run banks, likely on behalf of oil importers and some foreign portfolio investors weighed on the Indian currency, forex dealers said.
The home currency collapsed to a low of 67.79 in day trade against the dollar before recouping some of its losses on suspected market intervention by the RBI. The rupee finally closed at 67.50, showing a loss of 38 paise or 0.57 per cent.
For the week, the home currency depreciated by 44 paise after two-straight week pull back rally. The selling bias appears to have re-emerged at the end of the week due to macro-economic concerns, a forex dealer said.
Global crude prices were once again on an upward spiral leading to renewed fears over widening fiscal deficit and rising inflationary pressure.
Brent crude futures was trading sharply higher at USD 76.69 a barrel in early Asian trade, driven up by supply woes as Venezuela struggles to meet its supply obligations and by ongoing voluntary output cuts led by producer cartel OPEC.
The escalating trade battle in the midst of G-7 summit also weighed on the trading front. Meanwhile, Indian bond markets staged a rebound after two-day intense selling and the 10-year benchmark bond yield finished lower at 7.95 per cent after briefly climbing 8 per cent in early trade.
The RBI, meanwhile, fixed the reference rate for the dollar at 67.5228 and for the euro at 79.5824. In the cross currency trade, the rupee continued to drift against the pound sterling to end at 90.40 per pound from 90.01 and also declined further against the Japanese yen to settle at 61.75 per 100 yens as compared to 60.98.
The local unit, however, recovered against the euro to finish at 79.21 from 79.30 on Thursday. In forward market today, premium for dollar showed a mixed trend owing to lack of market moving factors.
The benchmark six-month forward premium payable in October softened to 109.50-111.50 paise from 110-112 paise, while the
far-forward April 2019 contract gained to 252-254 paise from 251-253 paise earlier.