Rupee seen weaker after oil hits new record

Mumbai: The Indian rupee could extend this week’s losses to fresh 8-month lows on Wednesday as record oil prices pump up dollar demand from refiners and heighten concerns about a widening trade deficit and rising inflation.

Oil rose to a record high of $122.73 a barrel on Tuesday. India imports 70% of its oil needs, and crude refiners such as HPCL and BPCL which are among the biggest Indian buyers of dollars.

The partially convertible rupee ended at 40.95/96 per dollar on Tuesday, 0.8% lower from Monday’s close of 40.61/62. The rupee fell as far as 41 per dollar during trade, its lowest since late August 2007, according to Reuters data.

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