The rupee dropped as much as 0.68 per cent against the dollar on Monday amid rising crude oil prices. The rupee declined to 69.82 against the greenback at the weakest point in morning, down as much as 47 paise compared from its previous close of 69.35. Dollar demand from importers with strengthening crude oil prices battered the rupee, according to analysts. A selloff in the domestic equity markets also dragged the rupee lower, they added. (Also read: Rupee bulls dig in as investors grapple with elections across Asia)
Brent crude futures - the global benchmark for crude oil - jumped to as much as $73.24 per barrel on Monday, logging their highest level recorded since November 7, 2018.
The jump in crude oil to the five-month high came after the Washington Post said US Secretary of State Mike Pompeo will announce "that as of May 2, the State Department will no longer grant sanctions waivers to any country that is currently importing Iranian crude or condensate".
“The rupee has been under pressure today due to sharp rise in the crude oil prices in the international market,” said Rushabh Maru, research analysts at financial services firm Anand Rathi.
Analysts expect some pressure to continue in the rupee over the near term.
“Crude prices have spiked on reports that the US may not extend waivers from sanctions granted to eight countries from buying crude from Iran… India features in the list of eight countries and therefore this development could adversely impact the rupee,” said IFA Global, a forex advisory firm.
“Profit booking in the domestic equity and strength in the dollar index have also pressurized the rupee,” Mr Maru added.
The dollar index - which measures the greenback against six major peers overseas - was last seen trading 0.01 per cent higher at 97.3880 on Monday.
Meanwhile, domestic equity benchmark indexes Sensex and Nifty fell as much as 0.80 per cent and 0.91 per cent during Monday's session respectively, dragged lower by selling in energy and banking stocks.
The forex market remained opened only for three days last week, marking a decline of 18 paise for the rupee against the dollar.
(With agency inputs)