Kamal Ghorui
In its sharpest single-day fall in more than a month, the rupee tumbled nearly 0.9 per cent to close at a record low of 95.31 against the US dollar on Monday as surging crude oil prices and escalating US-Iran tensions rattled financial markets, Reuters reported.The currency slide came after US President Donald Trump rejected Iran’s response to a proposed peace deal, fuelling fears over prolonged disruptions in global energy supplies through the Strait of Hormuz.Brent crude rose 2.5 per cent to $103.8 per barrel as shipping movement through the key oil transit route remained severely disrupted.The selloff spilled across Indian markets, with benchmark equity indices dropping 1.5 per cent and government bond prices weakening. The yield on India’s benchmark 10-year bond rose 6 basis points.The rupee’s fall marked its steepest one-day decline since March 27 and mirrored weakness across regional currencies.Over the weekend, Prime Minister Narendra Modi called for measures such as fuel conservation, reduced imports and lower travel consumption as rising oil prices began straining India’s foreign exchange position.India, one of the world’s largest energy importers, remains highly vulnerable to crude price spikes, which can widen the current account deficit, raise inflation and slow growth.“Structurally weak external funding conditions mean even a small widening of the current account deficit will continue to put pressure on the INR and FX reserves,” ANZ analysts said in a note, Reuters quoted.India’s forex reserves stood at $690.69 billion as of May 1, according to RBI data, down from the record high of $728 billion touched in February before the Iran conflict intensified.In global markets, the dollar index remained largely steady near the 98 mark, while US stock futures pointed to a muted start on Wall Street.
