Ripples Advisory, Rupee hits one-year low against US Dollar on surging oil prices
The rupee-dollar exchange rate stood at 65.80 on Thursday, a level last seen on 14 March 2017, while bond yields hit a near one-month high
The Indian rupee on Thursday hit one-year low against US dollar as traders fretted that expensive oil may led to a fiscal slippage, increase inflationary pressures and lower the chances of a interest rate cut by the Reserve Bank of India (RBI).
On Thursday, the rupee weakened for fourth session against US dollar while bond yields hit a near one-month high.
Rupee ended the day at 65.80 against US dollar—a level last seen on 14 March 2017—down 0.19% from its Wednesday’s close of 65.66. The rupee opened at 65.84 a dollar and touched a low of 65.85 a dollar.
Yields on 10-year government bonds closed at 7.63%—a level last seen on 26 March—up 10 basis points from its previous close of 7.535%. Bond yields and prices move in opposite directions.
Oil prices reached a fresh three-year high ahead of an Opec meeting on 20 April.
On Thursday, the benchmark index Sensex rose 0.28%, or 95.61 points, to 34,427.29 points; year to date, it is up 1%.
The rupee is already under pressure due to external factors, such as rising US bond yields, geopolitical concerns and a trade war threat. Slowing FDI inflows into local financial markets and the widening current account deficit have also dampened sentiment.
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