Forex traders said escalating tensions between Russia and Ukraine kept crude oil prices at an elevated level and heightened worries about domestic inflation and wider trade deficits.
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The rupee declined 81 paise to 76.98 against the US dollar in opening trade on Monday as intensifying geopolitical risks due to the Russia-Ukraine conflict pushed investors to the safe-haven appeal of the greenback.
Forex traders said escalating tensions between Russia and Ukraine kept crude oil prices at an elevated level and heightened worries about domestic inflation and wider trade deficits.
Besides, sustained foreign fund outflows and a lacklustre trend in domestic equities also weighed on investor sentiment. At the interbank foreign exchange, the rupee opened at 76.85 against the US dollar, then slipped further to 76.98, registering a decline of 81 paise from the last close.
On Friday, the rupee fell by 23 paise to close at 76.17 against the US dollar, the lowest closing level since December 15, 2021. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.29 per cent to 98.93.
Meanwhile, global oil benchmark Brent crude futures jumped 9.38 per cent to USD 129.19 per barrel. The Indian Rupee started weak this Monday morning as the dollar spiked along with crude oil this morning, said Sriram Iyer, senior research analyst at Reliance Securities.
Iyer added that the Reserve Bank of India (RBI) could be present to curb volatility. The US dollar and the yen are trading stronger this Monday morning in Asian trade as investors moved towards the safe-haven assets, Iyer noted.
On the domestic equity market front, the 30-share Sensex was trading 1,682.92 points or 3.10 per cent lower at 52,650.89, while the broader NSE Nifty slipped 459.95 points, or 2.83 per cent, to 15,785.40. Foreign institutional investors remained net sellers in the capital market on Friday as they offloaded shares worth Rs 7,631.02 crore, according to stock exchange data.
(With PTI inputs)
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