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Rupee falls on concern over high oil prices

Rupee falls on concern over high oil prices
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First Published: Thu, Nov 29 2007. 12 59 AM IST
Updated: Thu, Nov 29 2007. 12 59 AM IST
The rupee fell for a ninth day, its longest losing streak since June 2004, on speculation that importers bought dollars for month-end payments. Importers, such as Indian Oil Corp. Ltd, the nation’s biggest refiner, are buying dollars to pay for imports as crude oil prices climbed to a record this month. The rupee fell to the lowest in more than a month on concern higher crude prices will inflate India’s import costs, widening trade and current account deficits.
“Oil prices have come off record highs but may remain at elevated levels on expectations of a strong winter in the US, thus posing a significant risk for the rupee,” Siddhartha Bhotika, a Mumbai-based currency economist at ICICI Bank Ltd, said in a research note.
On Wednesday, the rupee fell to 39.80 against the dollar in Mumbai, from 39.79 on Tuesday, according to data compiled by Bloomberg.
Asia’s third largest economy imports three-quarters of its energy needs. Crude oil, which touched a record $99.29 (Rs3,941.81) a barrel on 21 November, has gained 55% this year. Gains in crude may affect the rupee and current account deficit, the Reserve Bank of India said.
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First Published: Thu, Nov 29 2007. 12 59 AM IST
More Topics: Rupee | Oil | Price | Money Matters | Currency |