Indian Rupee Hits Lifetime Low As Global Crude Oil Prices Soar

The Indian rupee hit a lifetime low in opening deals on Monday as a sharp surge in global crude oil prices threatened to push up imported inflation and widen the country’s trade and current account deficits.

The partially convertible rupee was trading at 76.92/93 per dollar, after touching 76.96, its weakest level ever. It had closed at 76.16 on Friday.

The benchmark 10-year bond yield was trading at 6.86%, up 5 basis points on the day.

Oil prices soared more than 6%, touching their highest since 2008 on Monday after the United States and European allies mull a Russian oil import ban while delays in the potential return of Iranian crude to global markets fuelled tight supply fears.

Indian shares tumbled over 2% on Monday, with investors dumping risky assets as oil prices soared after the United States and European allies were said to be mulling a Russian oil import ban.

The blue-chip NSE Nifty 50 index was down 2.39% at 15,857 by 0349 GMT and the S&P BSE Sensex dropped 2.52% to 52,963.78. Both the indexes extended losses to a fourth straight session. Last week, they also posted their fourth consecutive weekly loss.

India is the world’s third-largest importer of crude oil, and rising prices push up the country’s trade and current account deficit while also hurting the rupee and fuelling imported inflation.

The Nifty’s bank index, financial services index, private sector bank index, auto index and IT index were among the top losers, dropping between 2% and 4%.