Rupee slips 11 paise to 71.34 against US Dollar on crude oil scare

The rupee weakened by 11 paise to end 71.34 against the US dollar on Monday amid firming crude oil prices and persistent foreign fund outflows. Heavy selling in domestic equity markets also weighed on the rupee, forex traders said. This is the fourth straight session of loss for the domestic currency, during which it has depreciated by 64 paise.

At the Interbank Foreign Exchange (forex) market, the domestic unit opened weak at 71.35 and declined further to 71.52. However, it covered some lost ground and finally ended at 71.34, down by 11 paise against its previous close. The rupee had dropped 7 paise against the greenback Friday at 71.23.

Foreign portfolio investors (FPIs) remained sellers in Indian capital markets selling shares worth Rs 1,239.79 crore on a net basis Monday. FPI had sold shares worth Rs 966.43 crore on Friday, provisional data showed. "Rise in crude oil prices along with foreign fund outflows remained cause of concern for rupee.

Read | Sensex sinks 311 points to close at 35,498, Nifty drops below 10,700-mark

"Oil prices today touched the highest levels since November 2018. Crude oil has surged more than 20 per cent this year as Saudi Arabia and Russia pledged to expand their output cuts and on concern that US sanctions against Venezuela and Iran will exacerbate a tightening of supply," said V K Sharma, Head PCG and Capital Markets Strategy, HDFC Securities.

Brent crude futures, the global oil benchmark, was trading 0.15 per cent higher at USD 66.36 per barrel. The dollar index, which gauges the greenback's strength against a basket of six currencies, dipped 0.22 per cent to 96.69.

Domestic equity benchmarks wilted under selling pressure for the eight straight session Monday as risk appetite remained subdued amid sustained foreign fund outflows and geo-political concerns. The 30-share BSE Sensex tumbled 310.51 points, or 0.87 per cent to finish at 35,498.44, while the broader NSE Nifty fell 83.45 points, or 0.78 per cent, to 10,640.95.