Rupee Hits Fresh Low of 94.29 Versus Dollar

Mumbai, March 27: The Indian rupee hit a fresh low of 94.29 against the US dollar on Friday, falling 70 paise in afternoon trade from its previous close of 93.96. The domestic currency came under pressure as fears mounted that the energy supply crisis sparked by the West Asia war would drag on, deepening the strain on energy-importing economies.

Heavy selling in domestic equity markets and sustained FII outflows compounded pressure on the local unit, according to forex traders.

At the interbank foreign exchange, the Indian currency opened at 94.18 and weakened further to 94.29 against the US dollar in early trade, marking a decline of 33 paise from its previous close.

Excise Duty Cut

The government on Thursday cut excise duty on petrol to ₹3 per litre and eliminated the levy on diesel entirely, as it moved to shield consumers and oil-marketing companies from the impact of surging global crude prices amid the ongoing West Asia conflict. The Finance Ministry’s order, dated March 26, reduced the Special Additional Excise Duty on both fuels by ₹10 per litre each.

The BSE Sensex dropped 1,212.91 points or 1.61% to 74,060.54 and the Nifty 50 fell 351.10 points or 1.51% to 22,955.35 by 11:53 AM. India VIX spiked 7.98% to 26.61, reflecting a sharp deterioration in risk appetite.

Geopolitical Concerns

A global equity selloff stretched into a second day as early optimism over the US delaying its Iran deadline quickly faded.

US equities slumped nearly 2% on Thursday, the 10-year Treasury yield climbed past 4.4%, and Brent crude surged almost 6% on fears that a near-term halt to the conflict remains unlikely.

Asian markets followed suit, with the region’s benchmark share index falling 0.8%, South Korea’s market slumping 2.7% — dragged by chipmakers Samsung and SK Hynix — and Taiwanese shares dropping 1.4%.

COMEX Crude Oil edged down 0.77% to $93.75 on Friday, a marginal pullback after Trump extended Iran’s Strait of Hormuz deadline by 10 days, offering markets brief relief. However, with the Strait’s near-total closure having already pushed WTI up over 30% since hostilities began on February 28, and Gulf producers cutting output by at least 10 million barrels per day, the underlying supply shock remains largely unresolved.

Source: 
https://www.reuters.com/markets/currencies/usd/