The Indian rupee has broke through the 70-barrier once again after dipping to below 69 versus the American greenback at the end of last week. INR closed the trading day at 70.4575 against the US dollar, down 1.26 percent and the sharpest loss registered in a single session since August, according to data from Bloomberg. The rupee weakened today as oil prices jumped by more than 5 percent, with both US light crude and Brent crude rising per barrel. US light crude oil rose $2.92 a barrel to a high of $53.85, up 5.7 percent, before easing to around $53.25 by 14:20 GMT.
Brent crude rose 5.3 percent or $3.14 to a high of $62.60 and was last trading around $62.00, up $2.54.
Khoon Goh, head of research at Australia & New Zealand Banking Group Ltd, said: “The Indian rupee stands to benefit less from this as India is not as reliant on exports, and the bounce in oil prices could also weigh on the currency.”
The rupee has had a positive few weeks as it clawed back gains from falling oil prices, giving some much-needed breathing space for the crisis-hit tender.
Oil prices had slumped after the Organization of the Petroleum Exporting Countries (OPEC) expressed belief that demand was lowering enough to warrant cutting production by one million barrels per day in 2019.
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The threat of a slowdown in demand has been looming particularly from customers such as India, Indonesia and China, whose currencies have suffered on rising prices and a strong US dollar.
At its worst, the rupee lost about 14 percent of its value against the US dollar this year, making it the worst performing currency in Asia at the time.
Last week saw the Indian rupee hit a three-month high ahead of a central bank rate meeting where officials are expected to hold current borrowing costs.
India currently imports more than two-thirds of its oil needs.