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Indian rupee plummets to 15-month low against dirham

Issac John /Dubai
issacjohn@khaleejtimes.com Filed on October 11, 2021
Indian two thousand rupee banknotes are arranged for a photograph in Mumbai, India, on Sunday, Jan. 29, 2016. Reviving India's growth and boosting demand are essential as gross domestic product is likely to grow 7.1 percent in the year through March, the slowest pace in three years -- and this is before considering the impact of currency shortages in an economy where 98 percent of consumer payments are made in cash. Photographer: Dhiraj Singh/Bloomberg

(Dhiraj Singh)

The Indian currency plummeted by 37 paisa to close at a 15-month low of 75.36 against dollar as rising crude oil prices and a stronger greenback weighed on investor sentiment

The Indian rupee for the first time this year settled below the 75 level against the dollar and 20.536 against the dirham on Monday. The unit had closed at 74.99 on Friday.

The Indian currency plummeted by 37 paisa to close at a 15-month low of 75.36 against dollar as rising crude oil prices and a stronger greenback weighed on investor sentiment.

At the interbank foreign exchange market, the currency opened lower at 75.11 and witnessed an intra-day high of 75.06 and a low of 75.39 against the dollar in day trade.

Currency experts said the rupee finally settled down at a level not seen since July 14, 2020, even as the domestic equity market touched record levels.

They said with oil above $84 per barrel and US yields higher, USD/INR might continue to slide. Brent crude futures, the global oil benchmark, advanced 2.08 per cent to $84.10 per barrel as oil producers restrained supplies and leading energy consumers India and China grappled with energy crisis.

The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.23 per cent higher at 94.28.

Meanwhile, India's key equity indices — S&P BSE Sensex and NSE Nifty50 — made gains during Monday's mid-afternoon trade session.

In the process, Nifty50 breached the 18,000 points-mark. It touched a record high of 18,041.95 points during the intraday trade.

Senior stock market analysts said positive global cues along with expectations of healthy Q2FY22 results buoyed sentiments.

Dilip Parmar, research analyst, HDFC Securities, said the rupee continued bearish momentum on the back of a stronger dollar, following higher US Treasuries, and a surge in crude oil prices.

He said that even after a better risk-on sentiments market with domestic benchmark index at all-time high, rupee is driven by the rising dollar and crude oil prices. The absence of central bank intervention is also weighing on the rupee.

"Spot USD/INR is now having resistance at 75.65, the high of April 21 and support shifted to 75 level," Parmar noted.

On the domestic equity market front, In terms of sectors, media, realty, PSE, energy and auto gained the most.

The 30-scrip sensitive index, or Sensex, traded at 60,414.28 points around 1.25 p.m., up 355.22 points or 0.59 per cent. The index opened at 60,099.68 points from its previous close of 60,059.06 points.

Besides, the NSE Nifty50 traded at 18,020.70 points, up by 125.50 points or 0.70 per cent. It opened at 17,867.55 points from its previous close of 17,895.20 point.

— issacjohn@khaleejtimes.com

author

Issac John

Editorial Director of Khaleej Times, is a well-connected Indian journalist and an economic and financial commentator. He has been in the UAE's mainstream journalism for 35 years, including 23 years with Khaleej Times. A post-graduate in English and graduate in economics, he has won over two dozen awards. Acclaimed for his authentic and insightful analysis of global and regional businesses and economic trends, he is respected for his astute understanding of the local business scene.





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