Rupee Near All-Time Lows Against Dollar: 10 Things To Know

The traded 15 paise lower at 72.78, after earlier falling 33 paise in early trade on Tuesday, against the US dollar, reported news agency Press Trust of India (PTI). The rupee was on course to close lower against the greenback for a third consecutive session. A surge in crude oil prices to $82 a barrel - past their 2014 highs - along with strength in the dollar overseas battered the rupee, say analysts. The rupee had closed at 72.63 against the American currency on Monday. It is down more than 13 per cent against the dollar so far this year.

Here are 10 things to know:

1. The rupee opened lower at 72.89 against Monday's closing level of 72.63 a dollar at the interbank foreign exchange market here. It dipped near all-time lows 72.96 and erased some lost ground to quote at 72.70 in morning deals, it was trading at 72.78 at 1030 hrs, reported PTI.   

2. Overseas, the US dollar was higher against its major peers in early Asian trade.

3. Concerns on the current account deficit front on the back of soaring crude oil prices dragged the rupee lower.

4. Crude oil prices edging near four-year highs added to rupee's worries. Brent crude oil futures nudged up 0.2 per cent to $81.32 a barrel , reported news agency Reuters. Crude oil prices edged higher above $81 a barrel levels, near a four-year high of $81.48 hit in the previous session. Looming US sanctions against Iran and unwillingness by the Organization of the Petroleum Exporting Countries (OPEC) to raise output pushed the crude oil prices higher.

5. High crude oil prices tend to widen the trade deficit, and the current account deficit. India meets more than 80 per cent of its oil demand through imports.

6. The government is due to meet chiefs of PSU banks for an annual review on Tuesday. The government had last week proposed the merger of three state-run banks - Dena Bank, Vijaya Bank and the Bank of Baroda - to create the country's third largest lender. The board of Dena Bank has approved the merger plan.

7. The rupee could continue to remain under pressure, say analysts.

8. "This may cause the rupee to underperform its current account surplus emerging market counterparts... Cancellation of scheduled trade-related talks between US and Chinese officials has dampened risk sentiment," said IFA Global, a forex advisory firm.

9. China and the United States imposed new tariffs on each other's goods on Monday and neither side looks to be in the mood to compromise, raising the risk of a protracted battle that could chill investment and disrupt global trade.

9. The Reserve Bank of India has said the central bank and market regulator Sebi are watching market developments closely and would act if required.

10. The US central bank - the Federal Reserve - is set to begin its two-day policy meet later on Tuesday. Analysts will watch the central bank's commentary on the world's largest economy for direction in the currency markets. (With agencies inputs)