Mumbai: The rupee depreciated 21 paise to 91.29 against the US dollar on Monday, amid higher crude oil prices, a strong American currency and intense global volatility due to the escalated Middle East tension. Negative equity market sentiment and massive withdrawal of foreign funds also weighed on the Indian currency, forex traders said.
At the interbank foreign exchange, the rupee opened at 91.23 and declined further to 91.29 against the greenback in initial deals, trading 21 paise down from its previous closing level. On Friday, the rupee lost 17 paise to settle at 91.08 against the dollar. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.22 per cent higher at 97.78.
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India Faces No Immediate Oil Supply Disruption Despite Strait Of Hormuz Closure Fears, Price Volatility, Macro Pressures LoomBrent crude, the global oil benchmark, was up 3.91 per cent at 76.78 per barrel in futures trade. Analysts said that crude prices soared after the US and Israel launched military strikes against Iran. In the latest strike, the US and Israel forces pounded targets across Iran on Sunday, dropping massive bombs on the country's ballistic missile sites and wiping out warships. The attack was intensified after the killing of Iran's Supreme Leader Ayatollah Ali Khamenei.
Experts say that India faces the risk of a sharp increase in its import bill with the rising crude prices in the international market, as the country's 85 per cent fuel requirement is met through imports. On the domestic equity market front, the Sensex tumbled 691.47 points or 0.85 per cent to 80,595.72, while Nifty tanked 240.95 points or 0.96 per cent to 24,937.70 in early trade. On Friday, foreign institutional investors offloaded equities worth Rs 7,536.36 crore, according to exchange data.
According to the government data released on Friday, following a revamp of the GDP calculation framework, the country's economic growth has been projected at 7.6 per cent in the current fiscal. The latest RBI data released on Friday showed India's forex reserve dropped by USD 2.119 billion to USD 723.608 billion during the week ended February 20. The overall reserves had jumped by USD 8.663 billion to an all-time high of USD 725.727 billion in the previous reporting week.
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