Mumbai, May 7 (PTI): The rupee today crashed below the 67-mark to close at a 15-month low of 67.13 against the US currency following a surging demand for the dollar as crude oil prices zoomed past USD 75 per barrel level.
Huge dollar purchases by oil importing companies along with speculative activity largely weighed on the rupee, a currency dealer said.
The rupee drifted sharply to a low of 67.18 in late afternoon-deals before concluding at 67.13, revealing a steep loss of 26 paise, or 0.39 per cent.
This is the lowest level for the Indian unit since February 8, 2017 when it had ended at 67.19 against the US dollar.
The Indian currency has been the worst performer this year so far, losing 5.10 per cent since January.
A sudden flare-up in global crude prices rattled the forex market sentiment in a big way stoking concerns over widening trade deficit and higher capital outflows.
India being a net crude oil importer, a sharp rise in prices can affect the import bill and disrupt the fiscal position, a forex dealer commented.
Oil jumped to its highest levels since late-2014 on Monday to cross the significant USD 75 a barrel tag boosted by Venezuela’s deepening economic crisis and a looming decision on whether the United States will re-impose sanctions on Iran.
Brent crude, an international benchmark, was trading at USD 75.57 a barrel in early Asian trade.
“FIIs continue to be net sellers in Indian equities, adding further pressure on the rupee. To this end, CPI release scheduled later this week will be viewed with interest. Markets participants also watched the RBI’s recent move to conduct OMO; to buy government bonds worth up to Rs 10,000 crore on 17May,” said Anand James, Chief Market Strategist at Geojit Financial Services.
Adding to the negative feelings, importers rushed to cover their obligations, while exporters cancelled their previously booked forward contracts on growing expectation of a further fall in the rupee value near term.
Hardening concerns that an imminent Federal Reserve interest-rate increase will accelerate capital outflows further impacted trading mood.
Foreign investors and funds pulled out over Rs 15,500 crore from the Indian capital market in April, making it the steepest outflow in 16 months, due to surge in global crude prices and rise in yields of government securities here.
The RBI, meanwhile, fixed the reference rate for the dollar at 67.1060 and for the euro at 80.1179.
Meanwhile, government bonds rallied after the central bank said it will purchase debt to meet the cash needs of the banking system.
The yield on the benchmark 7.17 per cent debt maturing in 2028 dropped 11 basis points to 7.62 per cent from 7.73 per cent.
The dollar index, which measures the greenback’s value against a basket of six major currencies, was down at 92.65.
In the cross currency trade, the rupee dropped further against the pound sterling to close at 90.83 from 90.67 and slipped against Japanese Yen to finish at 61.42 per 100 yens as compared to 61.38 earlier.
The local unit, however strengthened against the euro to end at 79.97 from 80.00.
In forward market today, premium for dollar showed a mixed trend owing to lack of market moving factors.
The benchmark six-month forward premium payable in September ended steady at 101-103 paise, while the far-forward February 2019 contract edged up to 229-231 paise from last weekend level of 228-230 paise.