Mumbai: The Indian rupee could come under pressure on Tuesday as record-high oil prices may push oil importers to step up their dollar purchases, raising concerns of a widening trade deficit.
The partially convertible rupee ended at 40.61/62 per dollar on Monday, a shade above Friday’s close of 40.64/65.
Oil surged to a record highs over $120 a barrel on a softer U.S. dollar and supply concerns in Iran and Nigeria. [O/R]. India imports 70 percent of its oil needs.
Capital inflows into the stock market are a key driver for local unit. Foreigners bought almost $180 million of shares on Friday, the first trading session of May, compared to net purchases of $242 million in April. They have been net sellers of nearly $2.6 billion of stocks in 2008.