Mumbai, March 4 The rupee plunged by 67 paise to close at an all-time low of 92.16 against the US dollar on Wednesday, weighed down by soaring crude oil prices in the wake of the Iran crisis.
Forex traders said that the dollar index crossed 98 levels due to the risk-off sentiment prevailing globally amid the US-Iran crisis, further pressuring the rupee.
Moreover, massive selling in domestic equity markets and the withdrawal of foreign funds further dragged down the Indian currency, they said.
At the interbank foreign exchange, the rupee opened at 92.05 and touched an all-time intraday low of 92.35 against the greenback. The currency ended the session at an all-time low of 92.16 (provisional) against the dollar, registering a steep loss of 67 paise from the previous closing level.
On Monday, the rupee saw a steep loss of 41 paise to settle at 91.49 against the US dollar.
The forex market was closed on Tuesday due to Holi.
"A sharp escalation in the Middle East conflict and the consequent spike in oil prices have reduced investor risk appetite. Higher oil prices increase inflation concerns and fiscal pressure on India (a major oil importer), leading to selling in bonds and rising yields," Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.
Meanwhile, the dollar index, which gauges the strength of the greenback against a basket of six currencies, was trading 0.23 per cent lower at 98.82.
"The dollar index comfortably crossed 98 levels due to the risk-off sentiment prevailing globally, with stock and bond markets also experiencing significant declines, along with gold and silver, which are predominantly influenced by the dollar," Bhansali said.
Brent crude, the global oil benchmark, was up 1.29 per cent at $82.46 per barrel in futures trade, after the US attacks on Iran and Iran’s retaliatory measures, which threatened energy flows through the Strait of Hormuz, continued to underpin disruption worries.
On the domestic equity market front, the Sensex plunged by 1,122.66 points to settle at 79,116.19, while the Nifty dived by 385.20 points to 24,480.50.
On Monday, foreign institutional investors offloaded equities worth Rs 3,295.64 crore, according to exchange data.
