A vendor holds an Indian one hundred rupee banknote. (Photographer: Dhiraj Singh/Bloomberg)

Rupee Ends At Record Low Of 72.98/$

The rupee continued to slide today falling 47 paise against the U.S. dollar due to surging crude oil prices and escalating trade war worries.

The local unit settled at a record low of 72.98 against the greenback at close. Panic dollar demand from importers and speculative traders sent the home currency sinking to a historic low of 72.99 per dollar in late afternoon deals with very little chance of intervention by the Reserve Bank of India.

A sharp spike in international crude oil prices weighed on the trading front towards the tail-end session even as the dollar fell to a seven-week low after U.S President Donald Trump announced fresh tariffs on Chinese imports.

Also read: China to Cancel Talks If Trump Moves Ahead With Tariffs, Sources Say

Last night, Trump announced the the levying of an additional 10 percent duties on Chinese imports worth $200 billion. The benchmark Brent crude futures were up $1.14 to $79.19 per barrel, after hitting a high of $79.37 in early Asian trade.

Since Monday, the rupee has plunged 114 paise or more than 1.5 percent as trade war concerns resurfaced and crude oil rebounded. The high global crude oil prices are reinforcing fears of heightened inflation risks and are likely to disrupt the government’s fiscal math along with deteriorating global financial conditions.

Considering India’s net import of crude oil, the impact of imported inflation is expected to be significant. The benchmark 10-year sovereign yield also spiked to 8.14 percent.

Also read: Rupee Fall: Should Government, RBI Intervene Or ‘Keep Calm & Carry On’?

In cross-currency trade, the rupee slumped against the British Pound to settle at 95.84 per pound and dropped against the euro to end at 85.25. It also drifted against the Japanese yen to close at 65.13 per 100 yens from 64.71 yesterday.

Foreign investors withdrew Rs 1,143.73 crore on a net basis from capital markets today, provisional exchange data showed. Stock markets dropped by 0.78 percent due to selling in auto and financial shares.

Also read: Oil Rises as Saudis Are Said to Be Content With Prices Over $80