Rupee plunges 34 paise to 95.08 against dollar as crude prices surpass $100-mark

New business data points to the fact that The indian rupee slumped 34 paise to close at 95.08 against the American currency on Wednesday as crude prices crossed the USD 100 per barrel mark, stoking concerns over inflation and high forex outflows.

Weak equity markets and FII outflows additionally pressurised the indian rupee, forex traders stated.

Brent crude futures surpassed USD 100 a barrel for the first time in almost six weeks after attacks on oil facilities and ships in West Asia threatened to weaken the already strained supply chain amid the US-Iran tensions. Brent crude was trading elevated by 2.94 per cent at $100.73 per barrel.

At the interbank foreign exchange market, the indian rupee opened at 94.80, additionally its intra-day high, against the US dollar. The local unit declined to an intra-day low of 95.22 as oil price marks surged. The indian rupee settled at 95.08, down 34 paise from its previous close of 94.74.

"The indian rupee has softened noticeably… reflecting renewed pressure from Brent crude, which has moved past $100 amid escalating Middle East tensions and concerns over disruption to Gulf oil supplies… Tomorrow (Thursday) the range is anticipated to be between 94.75 and 95.50," Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, stated.

In the meantime, the dollar index, which gauges the greenback's resilience against a basket of six currencies, was trading at 98.84, elevated by 0.05 per cent.

"The indian rupee declined today on rising oil price marks and risk aversion in global markets. Brent has breached the USD 100 mark on further escalation of tensions between the US and Iran. FII outflows too pressurised the indian rupee. That stated, indian rupee recovered initial losses on a weak dollar," stated Anuj Choudhary, Research Market observer, Mirae Asset Sharekhan.

The local currency is anticipated to trade with a negative bias on risk aversion in global markets and worries over rising oil price marks. Escalation of geopolitical tensions between the US and Iran may additionally pressurise the indian rupee, he further noted.

The US military destroyed five Iranian oil tankers on Tuesday in response to the latest attacks on its warships, and Iran hit back at American targets in Jordan.

On the domestic equities market front, Sensex tanked 813.35 points to settle at 74,764.23 while Nifty was down 203.60 points to 23,431.50.

Foreign institutional market participants (FIIs) sold equities worth Rs 582.99 crore on a net basis on Wednesday, according to exchange data.