The rupee opened lower against the US dollar on Tuesday, as a record gain in crude oil prices fueled growth worries. At 09:06 AM, the rupee was trading at 71.86 a dollar, down 26 paise from its Monday’s close of 71.60. The home currency opened at 71.83 and touched a high and a low of 71.79 and 71.88 a dollar, respectively.
The currency plunged by 68 paise against the US dollar on Monday.
India’s current account and fiscal deficits could worsen if oil prices remain at the elevated level, Reserve Bank of India governor Shaktikanta Das told CNBC-TV18.
India is the world’s third-largest oil importer. Higher crude oil prices put pressure on India's trade deficit and thus the rupee.
In the currency market, the dollar was largely muted as traders broadly remained on the sidelines ahead of the US Federal Reserve meeting this week.
The Federal Reserve is expected to cut interest rates by 0.25 percentage point on Wednesday.
Against the yen, the dollar traded at 108.11, just below last week's high of 108.265, its highest level since Aug. 1.
Oil remains in focus after prices surged in the previous session. West Texas Intermediate futures gained more than 14 percent, notching its biggest one-day gain since 2008.
On Tuesday, oil prices fell more than 1 percent as the market awaited Saudi Arabia's response following attacks on its crude facilities.
Yemen’s anti-government Houthi movement, an ally of Iran, claimed responsibility for the attack that cut the kingdom’s production in half and fanned fears of retaliation in the Middle East, reported Reuters.
Brent crude was down 77 cents, or 1.1 percent, at $68.25 a barrel, while West Texas Intermediate was down 82 cents, or 1.3 percent, at $62.08 a barrel.
Foreign institutional investors (FIIs), who were net buyers for the past few sessions, offloaded shares worth Rs 751.26 crore on Monday, according to provisional exchange data.
In debt markets, the yields on the 10-year government bonds jumped 1.16 percent at 6.71 percent from the previous close of 6.64 percent. Bond yields and prices move in opposite directions.
First Published: Sept 17, 2019 9:12 AM IST
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