Rupee goes low & lower on oil fears, risk aversion

Mumbai: The Indian rupee dived to fresh record and intra-day lows past 95 to a dollar Tuesday after oil remained firm above $110 a barrel, stoking concerns that auto-fuel inflation would dent both the balance of payments and domestic price stability.

LSEG data showed the rupee slipped for a fourth straight record closing low to 95.28/$, after having hit an all-time trough of 95.43 to a dollar.

On Monday, the currency ended at 95.08/$.

"It all depends on crude oil prices. Plus, risk aversion has increased again after recent attacks on Iranian ships. Inflows are limited and the central bank, too, has limited scope of intervention," said Dilip Parmar, currency research analyst at HDFC Securities.

The Reserve Bank of India (RBI), dealers said, intervened via state run banks, and were selling dollars near record lows to help prevent the rupee from depreciating past 95.50/$ levels.

"Now, 95.70 acts as the immediate resistance, and 94.80 is the support," Parmar said.

The rupee's strongest level was at 95.25/$ on Tuesday, but it traded between 95.35 and 95.40 levels for most of the day.

Brent crude futures eased $1.38, or 1.2% on Tuesday, to $113 a barrel, according to Reuters.

"The rupee needs inflows which will give some space for RBI and the market to consolidate out of the current weakness," said a currency trader from a private sector bank.