The rupee declined by 43 paise on Monday amid soaring of crude oil prices and strengthening of the US dollar overseas. The rupee closed at 72.63 against the greenback, breaking its two-day rising streak. Fresh concerns on the US-China trade concerns along with a selloff in the domestic equity markets weighed on the currency, according to analysts. Rising crude oil prices - with the global benchmark Brent returning to 2014 highs around $80 a barrel - also affected the rupee. The rupee had on Friday closed higher at 72.20 against the US currency.
Here are 10 things to know:
1. The latest bout of weakness in the rupee came a day after the Reserve Bank of India said the central bank along with market regulator Sebi were watching market developments closely and would act if required.
3. While the latest tariffs imposed by China on US imports kicked in from Monday, reports said that China had cancelled upcoming trade talks with the US. Fears of further escalation of trade war between the world's two largest economies kept emerging market currencies including rupee under pressure.
4. The rupee could continue to remain under pressure, say analysts.
5. The overall appetite for Indian assets seems low as of now given higher crude prices and higher US yields, and there aren't likely to be any meaningful capital inflows, said IFA Global, a forex advisory firm.
6. Any decision on the key US interest rate will be watched closely by analysts this week.
7. "The Federal Open Market Committee (FOMC) rate decision on Wednesday is the most important event this week and will likely set the tone for the next leg of dollar move," IFA Global added.
8. Crude oil prices jumped more than 2 per cent on Monday to hit a four-year high of $80.94 a barrel. High crude prices tend to widen the current account deficit, as the country meets more than 80 per cent of its oil requirement through imports.
9. Equity markets extended losses to the fifth consecutive session. The BSE Sensex plunged 536 points, or 1.5 per cent, to close at 36,305, while the NSE Nifty dropped 168 points, or 1.6 per cent, to end at 10,974. The 30-scrip benchmark index has shed 4.7 per cent in five sessions.
10. The rupee is down more than 13 per cent against the American currency so far this year.
(With agency inputs)
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