The rupee moved 47 paise higher against the dollar to hit 73.10 on Wednesday. That marked the highest level recorded for the rupee against the greenback since October 3. Gains in the rupee came a day after crude oil prices registered their biggest single-session fall in three months. Selling of the greenback by exporters amid sharp losses in crude oil prices supported the rupee, say analysts. Advances in the domestic equity markets also supported the currency. The rupee had closed nearly unchanged at 73.57 against the US currency on Tuesday.
“The rupee could outperform its peers if crude prices manage to sustain at current levels,” said IFA Global, a forex advisory firm.
Crude oil price fell towards $75 a barrel to its lowest since late August, pressured by concern that demand is weakening and supply ample even as US sanctions loom on oil exporter Iran.
Brent crude – the international benchmark for crude oil – touched $75.11 a barrel during Wednesday’s session – its lowest level recorded since August 24. At 2:25 pm, Brent traded $1.28 a barrel lower at $75.16 a barrel. It had closed down 4.3 per cent in the previous session.
IFA Global expects the rupee to move in a likely range of 73.00-73.38 with a downside bias against the greenback.
While US sanctions on Iran which start on November 4 are expected to tighten supplies, other producers, notably top exporter Saudi Arabia, are already pumping more oil and willing to increase further if needed. (Also read: Crude seen at $65-$100 a barrel next year)
Despite Wednesday’s gains, the rupee is down more than 14 per cent against the dollar so far this year.