Rupee Vs Dollar: Continuing the trends of hitting fresh record lows, the Indian currency --Rupee-- started the first session of the week on a weak note and slumped to an all-time low of 96.25 in early trade on Monday. Persistent spike in crude prices, heightening global uncertainty, and a stronger dollar continue to remain key factors behind the weakening of the rupee as these aspects have together created a difficult environment for emerging market currencies.
In the interbank forex market, the rupee opened at 96.19 against the US dollar and later fell further to 96.25, a drop of 44 paise from its previous close.
Earlier on Friday, the Indian rupee fell below 96/USD to close at an all-time low of 95.81 against the US dollar. The dollar index, which measures the dollar's strength against a basket of six currencies, was trading 0.04 per cent higher at 99.32 due to rising tensions with Iran.
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Meanwhile, global oil benchmark Brent crude was trading above $111 per barrel in early trade.
Expert's Opinion
"With the rise in oil prices to beyond USD 111.50 per barrel, the rupee will be affected the most as rising oil prices increase the outflows of US dollar along with the outflows already happening due to FPIs," said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.
"Only stoppage of war and reopening of the Strait of Hormuz can bring about a lower demand on the $/rupee pair, else 100 seems to be on the card if RBI does not announce any schemes to increase dollar inflow into the country," Bhansali added.
Import Duties On Precious Metal
Days after imposing higher customs duties on gold, the government on Saturday banned silver imports, bringing the metal under a licensed system for inbound shipments. On May 13, the government raised the import duty on precious metals – gold and silver – from 6 per cent to 15 per cent.
Stock Market Today
Key domestic equity indices fell sharply on Monday. In early trade, the BSE Sensex was up 833.20 points at 74,404.79, while the Nifty fell 234 points to 23,401.70.
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According to exchange data, foreign institutional investors remained net buyers for the second consecutive session, purchasing equities worth Rs 1,329.17 crore on Friday.
Meanwhile, the Reserve Bank of India (RBI) said on Friday that India's foreign reserves increased by US$6.295 billion to US$696.988 billion in the week ended May 8.
(With inputs from agencies)