Rupee weakens to 83.09 against dollar as crude price surge rattles equities, currencies

Saudi Arabia and Russia shook the oil world when they extended production cuts to December

The rupee weakened marginally against the dollar, tracking losses in peer Asian currencies. At 9.10am on September 6, the home currency was trading at 83.09 a dollar, down 0.06 percent from its previous close of 83.04, and also lower than the opening rate of 83.02.

Global equities and currencies were under pressure after crude oil shot past $90 a barrel. Saudi Arabia and Russia shook the oil world by extending production cuts to December. Tighter supplies will, therefore, continue for four more months as against the market expectation of only up to October. Oil is the biggest imported commodity in India and any spike in oil prices will  widen the Current Account Deficit, analysts said.

Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, said the rupee is to be watched closely on the RBIs action as last time it made verbal warning to bankers to not take arb positions in NDF. It's a more of a wait and watch situation before one can decide on positions to be taken in the current environment.

Asian currencies were trading weaker. The Indonesian rupiah fell 0.23 percent, Malaysian ringgit 0.22 percent, Philippines peso and China Offshore lost 0.12 percent each, Taiwan dollar and South Korean won declined 0.1 percent each. But the Japanese yen gained 0.13 percent.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 104.71, down 0.1 percent from its previous close of 104.81.

With inputs from Bloomberg