Kamal Ghorui
The rupee weakened by 10 paise to settle at a fresh record low of Rs 92.40 (provisional) against the US dollar on Monday amid surging crude oil prices and incessant withdrawal of foreign funds triggered by geopolitical uncertainties, PTI reported.The local currency, however, resisted a sharper fall as domestic equity markets staged a significant recovery on hopes of a reopening of the Strait of Hormuz, forex traders said.At the interbank foreign exchange market, the local unit opened at Rs 92.44 and touched its lowest-ever intra-day level of Rs 92.47 against the greenback during the session. It finally ended at Rs 92.40 (provisional), down 10 paise from the previous close.In the preceding session, the rupee had hit its lowest intra-day level of Rs 92.47 before settling at Rs 92.30 against the dollar, which was then its weakest closing level.Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, said that some softness in the US dollar index and hopes of the reopening of the Strait of Hormuz cushioned the downside.According to Jigar Trivedi, Senior Research Analyst at IndusInd Securities, the rupee hovered near record lows, pressured by elevated crude prices and sustained foreign equity outflows.“Persistently high oil prices are forcing importers to purchase more dollars, widening India’s trade deficit and creating a material terms-of-trade shock,” he said, adding, “The Reserve Bank of India has intervened in FX markets to stabilise the currency and prevent excessive volatility.”Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.13 per cent lower at 99.97.Brent crude, the global oil benchmark, was trading higher by 1.46 per cent at USD 104.69 per barrel in futures trade.On the domestic equity market front, the Sensex surged 938.93 points, or 1.26 per cent, to settle at 75,502.85, while the Nifty climbed 257.70 points, or 1.11 per cent, to 23,408.80.Government data released on Monday showed that the country’s trade deficit narrowed to USD 27.1 billion in February compared to January. Merchandise exports dipped marginally by 0.81 per cent to USD 36.61 billion, while imports rose 24.11 per cent to USD 63.71 billion from USD 51.33 billion a year earlier.Foreign institutional investors sold equities worth Rs 10,716.64 crore on a net basis on Friday, according to exchange data.“Traders may take cues from the Empire State manufacturing index and industrial production data from the US. Investors will also watch out for the FOMC, ECB, Bank of Japan and Bank of England’s monetary policy this week,” Choudhary said, projecting the USD-INR spot price to trade in the range of Rs 92.10 to Rs 92.75.
