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This Article is From Aug 20, 2019

Rupee Extends Decline To Second Straight Day Amid Rising Oil Prices: 10 Things To Know

Extending its decline for a second straight day, the rupee fell by as much as 34 paise - or 0.53 per cent - to 71.81 against the dollar on Tuesday. After opening lower against the greenback at 71.56, down 13 paise from the previous close, the rupee slumped to as much as 71.81 during the session. Rising crude oil prices along with strength in the dollar overseas were seen exerting pressure on the domestic unit. Meanwhile, weakness in the equity markets also added to negative sentiment in the forex market. The rupee had ended at 71.43 against the dollar, its lowest level in more than six months - on Monday.

Rupee Extends Decline To Second Straight Day Amid Rising Oil Prices: 10 Things To Know
Till Monday's close, the rupee is down 2.38% against the dollar so far this year
  1. The rupee was last seen trading at 71.76 against the US currency in afternoon deals on Tuesday.
  2. Analysts say economic growth concerns continue to spook the rupee amid the ongoing US-China trade conflict affecting Asian peers.
  3. The rupee is likely to be driven by flows as the markets await triggers from key events, according to forex advisory firm IFA Global, which expects the rupee to trade in the range of 71.40-71.85 with an upward bias in the near term.
  4. "The RBI faces the challenge of transmission... Some banks have linked rates for new loans to retail and MSME (medium and small enterprises) clients to repo rate but the RBI has not yet formalised the system," IFA Global said.
  5. Foreign institutional investors (FIIs) remained net sellers in the capital markets, having pulled out Rs 9,362.83 crore ($1,344.77 million) from equities so far this month, data from NSDL showed.
  6. The 10-year government bond yield was flat at 6.59 per cent in afternoon trade.
  7. Hopes of government intervention to revive the economy may provide some support to the financial markets in the near term, according to analysts.
  8. International oil prices rose on Tuesday on hopes about easing of US-China trade tensions and announcements of stimulus measures by major economies to ward off a potential economic slowdown that could hit oil demand. Brent crude futures - the global benchmark for crude oil - were last seen trading up 0.42 per cent at $59.99 a barrel.
  9. The dollar index, which measures the greenback against six currencies, hit a more than three-week high. It was last seen trading 0.01 per cent higher at 98.3600 on Tuesday.
  10. Analysts will closely monitor the minutes of the latest scheduled meetings of central banks including the Reserve Bank of India and the Federal Reserve due this week.
(With agency inputs)

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