On Monday, the Indian rupee fell 0.3% to 95.2 versus the US dollar, crossing the 95 per dollar threshold for the first time. In contrast to Friday’s finish of 94.81, it closed at a record closing low of 94.83 per dollar. In the March quarter, the currency lost 4.4% of its value compared to the US dollar. The rupee lost its gains and dropped 160 paise from its opening level after the Reserve Bank of India (RBI) lowered the net open position limit that banks can hold overnight to $100 million. Furthermore, the rupee hit a record low of 94.84 against the dollar last week after declining by almost 1% for the fourth consecutive week.
The central bank announced Friday after market hours that banks must make sure their net open rupee positions in the onshore deliverable market do not above $100 million at the end of each business day by April 10. The size of these holdings is estimated to be between $25 billion and more than $50 billion. Concerns over high oil prices have put bonds on track for their worst fiscal year since 2023 and Indian stocks on track for their biggest monthly decline since March 2020.
Global crude oil prices have also increased due to the escalation of the conflict in West Asia. Nearing a new 52-week high, Brent oil futures surged 3% to an intraday high of $116.70 a barrel. West Texas Intermediate (WTI), the US benchmark, increased by more than 3% to surpass $103 a barrel. Due to geopolitical concerns, the rupee dropped by over 4% in March. Regarding the local equities market, the Nifty closed at 22,331.40, down 488.20 points or 2.14 percent, and the Sensex settled at 71,947.55, down 1,635.67 points or 2.2 percent. Exchange data shows that on Friday, foreign institutional investors sold stocks valued at Rs 4,367.30 crore on a net basis.
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