Rupee slips 7 paise against US dollar as crude soars beyond $90 per barrel levels

Rupee continued its fall against the US dollar on Tuesday, falling 7 paise to 95.68 in early trade as elevated crude oil prices and steady demand for the greenback weighed down the currency.Rupee had already lost 19 paise in the previous session, closing at 95.61 against the dollar on Monday. It opened at 95.68 at the interbank foreign exchange market on Tuesday.Market participants pointed to higher oil prices as one of the key pressures on the rupee. Brent crude was trading above $91 per barrel, with futures up 0.52% at $91.34 a barrel. Forex traders said the higher crude prices were increasing demand for dollars linked to oil payments.The currency market was also affected by concerns over dollar inflows after the Reserve Bank closed the concessional FCN (B) forex-swap facility earlier than expected.“The rupee opened lower as oil prices rose with the US and Iran remaining at odds over the Strait of Hormuz and there was no progress on a peace deal,” Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.The dollar remained broadly steady against major currencies, with the dollar index, which tracks the greenback against a basket of six currencies, at 99.63, down 0.01%.Bhansali said the rupee could remain under pressure as crude prices have moved above $91 per barrel.“Rupee looks vulnerable to the rising oil prices which have remained close to $90 and have now risen above $91 per barrel. RBI was protecting near 95.61 on Monday and may be protecting 95.75 today but will allow the depreciation to continue in view of the rising oil prices and consistent demand from oil companies,” he said.The weakness in the currency came alongside a subdued start for domestic equities. Sensex was down 278.32 points at 77,450.64 in early trade, while Nifty fell 57.65 points to 24,230.45.Foreign institutional investors also remained sellers in the equity market, offloading shares worth Rs 2,535.10 crore on a net basis on Monday, according to exchange data.Get the latest Business News and Live updates. Download the TOI app.