The rupee, which has resumed its losing streak despite a resounding diaspora response to forex-inflow programs, slumped to 96.34 in the offshore non-deliverable forward (NDF) market, pressuring the morning trade in the Mumbai spot market, said forex consultant KN Dey.
The spot rupee touched 95.99 intra-day, marking the lowest level in more than a week, while the Reserve Bank of India’s (RBI) likely intervention prevented the currency from breaching the 96 mark, traders said.
Economists ET spoke with have said the rupee could grind lower against the dollar this fiscal year, upending central bank expectations of a turnaround in fortunes, as high oil prices and US bond yields stoke inflationary expectations.
Brent crude surged to nearly $108 a barrel Monday, with Washington rejecting Iran’s conditional proposal to reopen the Strait of Hormuz that evacuates bulk of the Middle East supplies reaching Indian refiners. Global supply concerns deepened as US President Donald Trump indicated that a potential peace deal with Iran could come only after the US midterm elections in November.
India imports nearly 90% of its crude requirements.
The rupee opened the day at 95.88 a dollar, as against Friday’s close of 95.81, and remained under pressure on weak global cues. The volume was back in the forex market as the call for three-day bank strike was deferred. Monday was also the settlement day for September forex contracts.
Forward premia have risen to 4% for 3 months, 3.8% 6 months and remained at 3.5 % for 12 months.
