BackRupee slumps to near 3-month low vs US dollar, weakens past 76 per USD
Rupee dollar rate today: The Indian currency had slumped to 76.15 against the US dollar
PremiumThe Indian rupee weakened past the 76 per dollar mark, as the deepening crisis in Ukraine amid heightened investor anxiety after reports that Russian forces had attacked a nuclear plant in Ukraine. The rupee was trading at 76.16/17 per dollar - its lowest since mid-December 17. The rupee had closed at 75.91 on Thursday.
Most emerging Asian currencies and stocks weakened on Friday with analysts saying that the surge in international commodity prices, especially crude oil, is a key source of concern.
“Right now, volatility is shaped by the fears of the energinflation caused by the Russia Ukraine crisis that could affect the overall world economy. Today, the release of US jobs report will be watchful," said CR Forex Advisors.
Oil prices are set to post their strongest weekly gain since the middle of 2020, with Brent up 16% after hitting their highest levels in a decade this week.
Russia is one of the world's biggest exporters of key raw materials, from natural gas and crude oil to aluminium and wheat, so the possible exclusion of supplies from the country due to sanctions has sent traders and importers into a frenzy.
India imports more than two-thirds of its oil needs and the surge in crude threatens to push up the country's trade and current account deficit and pressure the rupee.
With international oil prices - on which domestic fuel retails are directly benchmarked - spiking in the last two months, state-owned fuel retailers "need a massive price hike of ₹12.1 per litre on or before March 16, 2022, just to breakeven and a price hike of ₹15.1 is required" after including margins for oil firms, ICICI Securities said in a report.
In a note, Emkay Global Financial Services said: “The soaring Crude oil and commodity prices have also hit economies hard since the Russia-Ukraine conflict began. This has now stoked fears that recent high inflation could combine with stagnant economic growth, making it more difficult for the Federal Reserve and other major central banks to manage interest rate. The markets will be keenly watching the US Non-farm payrolls number due to be released later today. We expect the Rupee to see further depreciation towards 76.44 levels if the pair sustains above 76.10. Levels around 75.50 are major support"
(With Agency Inputs)
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