Rupee came under sharp pressure in early trade on Monday, slipping close to its record intra-day low as surging crude oil prices and a stronger US dollar weighed on the domestic currency amid escalating tensions in the Middle East. The slide in the rupee followed a sharp spike in global oil prices. Brent crude, the global benchmark, jumped over 25% to trade at $118 per barrel in futures trade as the war between US-Israel and Iran intensified. Forex traders said the local unit also faced pressure from strong foreign institutional investor outflows and a steep decline in domestic equities during morning trade. The rupee had already ended the previous session weaker, declining 18 paise to settle at 91.82 against the US dollar on Friday. “Rupee will remain vulnerable to the rising oil prices which have risen by more than 28% since the last closure on Friday. Asian currencies were also lower on Monday,” Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said. He further noted that the currency could weaken further if oil prices stay elevated. Rupee might touch 93.00 if oil remains above $100 in the coming trading sessions, he added. Meanwhile, the dollar index, which tracks the greenback against a basket of six major currencies, rose 0.66% to 99.64. Back in India, Dalal Street continued to trade under pressure as benchmark indices saw a sharp sell-off in early trade. The Sensex plunged over 2,400 points, while the Nifty dropped 708.75 points to trade below 24,000. Exchange data showed that foreign institutional investors were net sellers in the previous session, offloading equities worth Rs 6,030.38 crore on Friday. Separately, the Reserve Bank said India’s foreign exchange reserves increased by $4.885 billion to reach a record high of $728.494 billion in the week ended February 27.
