Rupee plunges 47 paise to Rs 92.21 against dollar as oil crosses $100

Indian Rupee

The rupee tanked 47 paise at the open on March 9, just shy of a record low, as oil prices jumped overnight to trade at more than $100 per barrel as Iran war intensified with fuel assets coming under fire.

The currency was trading at Rs 92.21 against dollar after ending the previous session at Rs 91.74. The rupee was hovering close to record low of Rs 92.31, which it plunged to last week.

The US-Israel and Iran, which is now in its second week, is showing no signs of coming to an end and even desalination and fuel assets are being targeted. The intensifying conflict has rattled global businesses and energy prices have been jumping almost every day, leading to fears of an oil shock. Brent crude has jumped more than 25 percent since the beginning of month and is now trading at $110 a barrel.

Higher Brent crude prices are a negative o for India, which meets more than 85 percent of its energy needs through imports and can widen the country’s currency account deficit.

The Reserve Bank of India (RBI) has been selling its forex reserves to maintain some stability in the rupee. The central bank was said to have sold nearly $12 billion last week to contain excessive volatility, according to traders.

“The rupee will remain vulnerable to the rising oil prices, which have risen by more than 28% since the last closure on Friday. We expect the rupee to touch Rs 93 if oil remains above $100 in the coming trading sessions,” analysts from Finrex Treasury Advisors said.