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Business News/ Markets / Stock Markets/  Rupee closes six week low as crude prices jump
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Rupee closes six week low as crude prices jump

The Indian unit opened at 71.62 a dollar and touched a low of 71.83

Since 1 April, the rupee has weakened over 3% against US dollarPremium
Since 1 April, the rupee has weakened over 3% against US dollar

The Indian rupee on Friday closed at a six week low against the US dollar following a spike in international crude oil prices amid escalating tensions in West Asia after a US airstrike killed a top Iranian commander.

The domestic currency ended at 71.81 a dollar -- a level last seen on 20 November, down 0.59% from Thursday's close of 71.37. The Indian unit opened at 71.62 a dollar and touched a low of 71.83.

Crude oil surged over 3.5% after the death of Iranian commander Qassem Soleimani, who led the Revolutionary Guards’ Quds force, heightening the fears of an armed conflict between the US and Iran that could easily pull in other countries, a Bloomberg report said.

"(We expect) the Geo political tension in the Middle East may rise further. This may keep crude oil prices higher in the short term at least. This may lead to some panic dollar demand from importers. Markets are also awaiting further details regarding the trade deal between the US and China", said Rushabh Maru, Research Analyst - Currency and Commodity, Anand Rathi Shares and Stock Brokers

Maru expects the rupee may remain under pressure and it may weaken till 72.00 - 72.20 in the short term

Since 1 December, oil prices have risen over 13.5% supported by the progress in US-China trade talks and the political unrest in Iraq.


Government bond yields fell after Reserve Bank of India announced its third ‘operation twist’. The RBI plans to buy three bonds for a combined 10000 crore on 6 January.

The 10 year bond yield was trading at 6.497% from its previous close of 6.503%.

Since 1 April, the rupee has weakened 3.8%, while foreign investors have bought nearly $6.08 billion in Indian equities and $2.22 billion in debt.

The benchmark equity index Sensex fell 0.39% or 162.03 points to closed at 41464.61 points. Since 1 April, it has gained 7.64%.

Asian currencies were trading lower. South Korean won was down 0.48%, Philippines peso 0.31%, Malaysian ringgit 0.25%, Singapore dollar 0.12%, Indonesian rupiah 0.12%, China Offshore 0.06%, Taiwan dollar 0.05%. However, the safe-haven Japanese yen was up 0.45%. Hong Kong dollar fell 0.08%.

The dollar index, which measures the US currency’s strength against a basket of major currencies, was at 96.745, down 0.11% from its previous close of 96.846.

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Published: 03 Jan 2020, 09:31 AM IST
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