Rupee edges lower to 71.34 owing to Kashmir tension, rising crude prices

At the Interbank Foreign Exchange (forex) market, the domestic unit opened weak at 71.35 and declined further to 71.52.

Published: 19th February 2019 01:02 AM  |   Last Updated: 19th February 2019 10:45 AM   |  A+A-

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Image used for representational purpose only. (File photo | Reuters)

By Express News Service

NEW DELHI:  Pressured by rising oil prices, geopolitical concerns, and persistent foreign fund inflows due to tensions over Kashmir, the rupee slipped by 11 paise to end at 71.34 against the US dollar on Monday.

Heavy selling in domestic equity markets also weighed on the rupee, said forex traders.

This is the fourth straight session of loss for the domestic currency, during which it has depreciated by 64 paise.

At the Interbank Foreign Exchange (forex) market, the domestic unit opened weak at 71.35 and declined further to 71.52. However, it covered some lost ground and finally ended at 71.34, down by 11 paise against its previous close.

Brent crude futures, the global oil benchmark, was trading 0.15 per cent higher at $66.36 per barrel. According to V K Sharma, Head, PCG and Capital Markets Strategy, HDFC Securities, the oil prices on Monday touched the highest levels since November 2018.

“Crude oil has surged more than 20 per cent this year as Saudi Arabia and Russia pledged to expand their output cuts and on concerns that US sanctions against Venezuela and Iran will exacerbate a tightening of supply,” he said.

Analysts also said it could translate into more trouble for rupee in the coming sessions, coupled with the sustaining political uncertainty. 

“Weakening of rupee, inching up of 10-year yield and rising oil prices are expected to weaken domestic macros. Further, the volatility in the market will continue due to lack of domestic triggers and investors are likely to remain cautious,” said Vinod Nair, Head of Research, Geojit Financial Services Ltd.

However, the global market stands positive supported by hope in US-China trade deals, he added.

The 30-share BSE Sensex tumbled 310.51 points, or 0.87 per cent, to finish at 35,498.44, while the broader NSE Nifty fell 83.45 points, or 0.78 per cent, to 10,640.95.

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