3 weeks ago
Rupee falls against US dollar as crude prices surge
The rupee is the money used in India, while the US dollar is the money used in America, and people compare the two when countries trade.
On Tuesday, the rupee became a little less valuable compared to the dollar.
One report says it ended the day at 95.43 rupees per dollar, down 13 paise, while another says it settled at 95.36 rupees per dollar, down 6 paise.
A paise is a small part of a rupee, just like a cent is part of a dollar.
The fall happened partly because the price of oil went up, and oil is usually bought using dollars.
Worries around the world, such as tensions in the Middle East, also made traders cautious.
Foreign investors putting money into India helped support the rupee a little.
A company called Fitch Ratings said India's economy remains strong even with these challenges.
The rupee fell against the US dollar on Tuesday, settling at 95.43 (provisional), down 13 paise, according to one report, or at 95.36, down 6 paise, according to another — the two reports contradict each other.
Forex traders said the decline was driven by a surge in crude oil prices, rising US Treasury yields, and geopolitical uncertainties, including uncertainty over a US-Iran deal.
Recent foreign capital inflows provided some support to the local unit; reports cite net FII equity purchases of Rs 1,974.76 crore (Monday) and Rs 258.55 crore (Tuesday).
Fitch Ratings affirmed India's sovereign rating at 'BBB-' with a stable outlook, saying the domestic economy remains strong despite the energy shock from the West Asia crisis.
Brent crude jumped 2.45% to USD 89.87 per barrel, while the Sensex fell 388.19 points to 78,154.25 and the Nifty declined 112.10 points to 24,471.70.
- Who
- The Indian rupee and foreign exchange traders, with analysis from Anuj Choudhary of Mirae Asset ShareKhan; Fitch Ratings also affirmed India's sovereign rating.
- What
- The rupee depreciated against the US dollar on Tuesday — settling at 95.43 (provisional), down 13 paise, according to one report, or at 95.36, down 6 paise, according to another.
- Where
- Mumbai's interbank foreign exchange market.
- When
- Tuesday (August 11 per one report's dateline), following a 13-paise fall on Monday.
- Why
- A surge in crude oil prices, rising US Treasury yields, and geopolitical uncertainties, including uncertainty over a US-Iran deal, weighed on the rupee, partly offset by foreign capital inflows.
Key facts
- Rupee close (Report 1)
- 95.43 per US dollar, down 13 paise (provisional)
- Rupee close (Report 2)
- 95.36 per US dollar, down 6 paise
- Previous close
- 95.30 per US dollar (Monday)
- Trading range
- 95.36-95.45
- Brent crude
- USD 89.87 per barrel, up 2.45%
- India sovereign rating
- BBB- with stable outlook (Fitch Ratings)
- Domestic equities
- Sensex 78,154.25 (down 388.19); Nifty 24,471.70 (down 112.10)
- Dollar index
- 99.86, up 0.06%
Quotes
Anuj Choudhary
Research Analyst at Mirae Asset ShareKhan
“We expect the rupee to trade with a slight negative bias. However, any intervention by the RBI may support the rupee at lower levels. Traders may remain cautious ahead of US inflation data this week.”
thehansindia.com
“"The rupee declined on a surge in crude oil prices and rising US Treasury yields. Uncertainty over the deal between the US and Iran also weighed on the rupee."”
thehansindia.com
theprint.in
Sources
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