Rupee ends at record low as crude prices rise on geopolitical concerns
Advertisement

Rupee ends at record low as crude prices rise on geopolitical concerns

By Reuters

  • 16 Oct 2023
Rupee ends at record low as crude prices rise on geopolitical concerns
Credit: Pixabay

The Indian rupee ended at its lifetime closing low on Monday as a jump in crude oil prices and weakness in other Asian currencies pressured the local unit.

The rupee closed at 83.2775 against the U.S. dollar, little changed from its previous close of 83.2625. The currency hit its previous record closing low of 83.2675 on Sept. 18.

The dollar index held steady at 106.5 and Asian currencies weakened, with the Korean won leading losses after a 0.27% fall.

Advertisement

The rupee is "slowly weakening but remains sticky as usual," a foreign exchange trader at a foreign bank said.

The stickiness is largely attributable to the Reserve Bank of India (RBI) whose likely interventions have limited the weakness.

The RBI likely intervened during the earlier part of the spot trading session and also supplied U.S. dollars during the mid-day fixing window, traders said.

Advertisement

Near the end of the session when the rupee fell to 83.28, its weakest level during the day, state-run banks were seen selling U.S. dollars again, likely on behalf of RBI, four traders said.

Brent crude oil futures fell slightly but held above $90 after having risen 6% on Friday amid concerns about escalations in the ongoing conflict in the Middle East.

"Uncertainty in the Middle East and higher energy prices will see investors continue to back the energy-independent dollar for the time being," ING Bank stated in a note.

Advertisement

For now, the RBI is likely to keep defending the 83.30 level on the rupee but 83.40 would be the next support if that level is breached, said Sajal Gupta, head of forex and commodities at Nuvama Wealth Management's institutional desk.

Share article on

Advertisement
Advertisement