Mumbai, June 13:
The rupee plummeted 59 paise to 86.11 against the US dollar on Friday due to a spike in global oil prices and a firm dollar amid rising tensions in the Middle East following Israel’s attack on Iran’s nuclear sites.
Brent crude, the global oil benchmark, rose sharply by 7.27 per cent to USD 74.40 per barrel in futures trade.
At the interbank foreign exchange, the rupee opened at 86.25 against the greenback and traded in the range of 85.92-86.25 before closing at 86.11, up 59 paise from its previous close.
The local unit had settled at 85.52 on Thursday.
Weak domestic equity markets and FII outflows further contributed to the fall in the local unit, forex traders said.
“The rupee fell to a low of 86.25 before recovering to 85.92 before ultimately closing at 86.07. It has taken one country’s military strike on another to bring home the fragility of markets,” Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.
“The RBI did support the rupee... oil prices were a concern as an increase of USD 10 increases trade deficit by USD 12 billion and CPI inflation by 50 bps,” he said.
In the domestic equity market, the 30-share BSE Sensex tanked 573.38 points to settle at 81,118.60, while Nifty dropped 169.60 points to 24,718.60.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.33 per cent to 98.24.
Foreign institutional investors (FIIs) offloaded equities worth Rs 1,263.52 crore on a net basis on Friday, according to exchange data.
“FPIs continued to remain sellers of equity and buyers of the US dollar, while oil companies bought dollar on rising oil prices. Iran has closed its airspace, affecting our airline routes already hit by the closure of the route by Pakistan.
“For Monday, we expect the rupee to trade in a similar range of 85.75-86.50 as we await India’s trade deficit data to be released,” he added. (PTI) |
