Guwahati: In early trading on Monday, the Indian rupee hit a new low, as a sharp rise in global crude oil prices threatened to raise imported inflation and widen the country’s trade and current account deficits.
After touching 76.96, the partially convertible rupee was trading at 76.92/93 per dollar, its lowest level ever. On Friday, it had closed at 76.16.
The yield on the benchmark 10-year bond was 6.86 percent, up 5 basis points on the day.
Oil prices rose more than 6% on Monday, reaching their highest level since 2008, as the US and its European allies consider imposing a Russian oil import ban, while delays in the likely return of Iranian petroleum to global markets fueled supply concerns.
Indian stocks fell more than 2% on Monday, with investors fleeing risky assets as oil prices jumped on reports that the US and its European allies were considering a Russian oil import ban.
By 0349 GMT, the blue-chip NSE Nifty 50 index had fallen 2.39 percent to 15,857, while the S&P BSE Sensex had fallen 2.52 percent to 52,963.78. Both indices extended their losses for the fourth day in a row. They also dropped for the fourth week in a row last week.
India is the world’s third-largest crude oil importer, and rising prices exacerbate the country’s trade and current account deficits, as well as depreciating the rupee and fueling imported inflation.
It may be mentioned that the Nifty’s bank index, financial services index, private sector bank index, auto index and IT index were among the top losers, dropping between 2% and 4%.