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Rupee falls 19 paise on trade deficit, rising oil prices

Rupee falls 19 paise on trade deficit, rising oil prices – The Financial Express

Published: May 18, 2019 12:27:39 AM

The rupee on Friday closed at Rs 70.22 against the dollar, a fall of 19 paise over the previous close of Rs 70.03 on Thursday, primarily on account of a higher trade deficit and rising crude oil prices.

Asian currencies have been under pressure amid the rising trade war between the US and China

By Shashank Nayar

The rupee on Friday closed at Rs 70.22 against the dollar, a fall of 19 paise over the previous close of Rs 70.03 on Thursday, primarily on account of a higher trade deficit and rising crude oil prices.

Brent crude prices have been increasing for the past four trading sessions – an increase of 3.5% and are ruling at $72.71 per barrel (bbl).

Foreign Portfolio Investors (FPIs) have pulled out $1.2 billion from the equity market in the past seven trading sessions till May 17 on the back of an inflow of $1.5 billion in April. Provisional data showed that FPIs pulled out $150.6 million from the equity market on May 17 even as the benchmark Sensex index rose 1.44% to 37,930.77.

Asian currencies have been under pressure amid the rising trade war between the US and China. The Chinese renminbi and the South Korean won have lost nearly 3% and 4%, respectively, in the past two-weeks.

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“We expect the rupee to trade at current levels as political uncertainty and global sentiments are currently negative towards emerging markets,” said Sajal Gupta, head-forex, Edelweiss Securities.

However, the rupee has been able to hold losses against its Asian peers, added Gupta. Treasurers also believe the Reserve Bank of India has intervened in the market.

Dealers also attributed the fall to some profit booking and some speculative trades ahead of the election. “Participants have got into some profit booking while foreign investors have been selling Indian equities speculating exit poll results and on account of higher crude prices,” said MV Srinivasan, V-P, Mecklai Financial. The most traded bond – 7.17% yielding paper maturing in 2028 – closed Friday’s session at 7.48%, one basis point higher than the previous close on Thursday.

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Source: Financial Express