Mumbai, March 4 The rupee plunged by 69 paise to a historic low of 92.18 against the US dollar on Wednesday, as a sharp rise in crude oil prices amid geopolitical tensions following the escalation of the US-Iran conflict weighed on investor sentiment.
Forex traders said that the domestic currency is under severe pressure due to the sharp rise in crude oil prices. The price of Brent Crude crossed the USD 82 per barrel level in futures trading, following the Iran crisis, which dampened investor sentiment.
At the interbank foreign exchange market, the rupee opened at 92.05, then fell to an early low of 92.18 against the American currency, registering a fall of 69 paise from its previous close.
On Monday, the rupee had closed at 91.49 against the US dollar.
The forex market was closed on Tuesday due to Holi.
Traders said that the USD/INR pair remains under pressure as investors are moving towards safe-haven assets. Moreover, persistent foreign capital outflow from the equities, and fears grow that expensive imports will hurt the trade balance.
Meanwhile, the dollar index, which gauges the strength of the greenback against a basket of six currencies, was trading 0.03 per cent higher at 99.08.
Brent crude, the global oil benchmark, was up 1.01 per cent at USD 82.22 per barrel in futures trading, following the escalation of the US-Iran crisis.
Experts say that India faces the risk of a sharp increase in its import bill with the rising crude prices in the international market, as the country's 85 per cent fuel requirement is met through imports.
On the domestic equity market front, the Sensex tumbled by 1,671.39 points or 2.08 per cent to 78,567.46, while Nifty tanked by 502.35 points or 2.02 per cent to 24,363.35 in early trade.
On Monday, foreign institutional investors offloaded equities worth Rs 3,295.64 crore, according to exchange data.
