INR Vs USD: Consistent dollar demand from importers, mainly oil refiners also kept the rupee under pressure, traders said.
The rupee crashed to a new all-time low of 73.77 against the US dollar on Thursday, reported news agency Press Trust of India (PTI). The local currency dropped 44 paise against the US currency in the morning session as global oil prices continued to rise, deepening concerns about the current account deficit (CAD) and capital outflows. Consistent dollar demand from importers, mainly oil refiners also kept the rupee under pressure, traders said. The state-owned oil marketing companies have been allowed to raise $10 billion from overseas market to meet their working capital needs.
1.”The adverse situation for rupee is continuing with consistent rise in crude oil prices, hike in interest rate by Federal Reserve, sustained tensions in global trade and the widening current account deficit”, Mohit Ralhan, Managing Partner & Chief Investment Officer, TIW Private Equity told NDTV.
2.Reserve Bank of India (RBI) on post-market hours on Wednesday said that it will allow state oil marketing firms to raise $10 billion in overseas loans to help them deal with a sharp rise in crude oil prices and a falling rupee currency.
3.However, government’s latest move is likely to have little impact, said forex advisory firm IFA Global in a note. All eyes will now be on the RBI monetary policy scheduled for Friday. Weakness in domestic stocks and bonds is likely to continue. We may see a strong sell off in bonds on account of higher US rates and higher crude prices, it added.
4.Government also waived a requirement for the companies to hedge dollars while raising funds from the overseas markets.
5.The central bank has recently said it would pump Rs. 36,000 crore into money markets in October.
6.The rupee has lost as much as 13 percent to the dollar since the beginning of the year, adding to the nation’s oil import bill at a time when crude is hovering at around $85 a barrel.
7.On Wednesday, the rupee declined sharply lower against the US dollar to close at a record 73.34, amid soaring crude oil prices.
8.The dollar notched an 11-month top on the yen on Thursday as strong US economic data drove Treasury yields to their highest since mid-2011, while Asian stocks were pressured as borrowing costs rose at home.
9.Oil prices have reached four-year peaks as the market focused on upcoming US sanctions on Iran while shrugging off the year’s largest weekly build in US crude stockpiles. Brent eased 18 cents to $86.11 a barrel on Thursday, while US crude fell 16 cents to $76.25.
10.Stock markets started Thursday’s session on a highly negative note. At 9:46 am, the S&P BSE Sensex was trading 537.65 points, or 1.49 per cent, lower at 35,437.98 while the Nifty 50 was down 155.75 points or 1.43% at 10,702.50. (With inputs from agencies)