Indian rupee closes all-time low as crude prices rise

Mumbai : The rupee closed at a new all-time low against the US dollar yesterday, pressured by rising crude oil prices and intensifying US-China trade war tensions. The rupee had fallen more than 12 percent against the dollar this year and it is the worst performing Asian currency year-to-date, stung by an emerging markets sell-off and higher crude oil prices that have widened the country’s current account deficit.

After gaining against the dollar early in the day, the rupee slumped to close at 72.9750 against the dollar, after dipping to a record low of 72.99 just before trading ended. Last week’s record low of 72.9150 was breached on Tuesday despite intervention from the Reserve Bank of India (RBI) that sold dollars late in the day in a bid to stem the slide in the rupee, said dealers.

“There was no reason for the rupee to fall so much,” said one forex dealer. “Crude prices went up and suddenly people started shorting, that shows there’s no confidence in the rupee. The RBI sold about $400 million to $500 million to calm markets, but that didn’t work.” A senior government official told Reuters earlier on Tuesday that India sees a rupee value of 72-73 against the US dollar as a “fair value.” The government late last week announced a raft of measures to stabilise the falling local currency.