Rupee at life-time low, crude rises further amid Ukraine crisis
Tribune News Service
New Delhi, March 7
There are heightened concerns about inflation and wider trade deficits after the rupee sank to a lifetime low against the dollar and the Brent crude futures rose a further 6.55 per cent to $125.85 per barrel.
The stock market also continued its precipitous slide on the opening day of the week. Sensex fell by nearly 1,500 points to settle at 52,842.75 and NSE Nifty dropped 382 to 15,863.15. Foreign institutional investors were net sellers in the capital market on Friday as they offloaded shares worth Rs 7,631.02 crore, according to stock exchange data.
The rupee fell to 77.01 against the dollar on Monday as intensifying geopolitical risks compelled investors to put their faith in the American currency. On Friday, the rupee had fallen by 23 paise to close at 76.17.
“The Indian rupee has plummeted to a lifetime low against the dollar as the deepening Russia-Ukraine conflict has sapped risk appetite in the market while prompting safe-haven flows into the US dollar,” Sugandha Sachdeva of Religare Broking said.
West Texas Intermediate crude future was at $ 130.50 per barrel on Sunday while Brent crude hit $ 139.13. The basket of crude oil that India buys rose above $ 111 per barrel on March 1, according to the Petroleum Planning and Analysis Cell. The current pump prices are based on the assumption that crude is at $ 81.5 per barrel.
With the last phase of polling ending on Monday, the government is likely to green-light a price revision to reflect the higher rates ruling in the market. The expectation is that oil companies will gradually tweak the rates upwards on a day-to-day basis. Domestic fuel prices, which in theory are directly linked to international oil prices, have not been revised for 123 days in a row.
