By Admin 
Dollar vs Rupee: Amid rising tensions in the Middle East, the Indian rupee has become the weakest performing currency in Asia. According to Bloomberg data, on Friday morning, the last trading day of the week, the rupee fell by 64 paise and for the first time reached a record low of 93.28 against the US dollar. A day before this, on Thursday, it had closed at the level of 92.63 during trading. So far this year, a huge decline of about 3.64 percent has been recorded in the rupee.
Rupee falling, oil rising
On Thursday, a sharp jump was seen in the prices of Brent crude oil and at one time it increased by 10.9 percent to reach $ 119.1 per barrel. However, later there was some decline in it and on Friday morning it was seen trading at $ 107.2 per barrel. This rise in oil prices is being seen at a time when Israel has attacked Iran’s South Pars gas field.
After this, Iran warned the Gulf countries that many energy sites are now “legitimate targets”. However, Israeli PM Benjamin Netanyahu later indicated that attacks on energy infrastructure would be avoided in the future, while US President Donald Trump also clarified that there are currently no plans to deploy troops in West Asia.
What are experts saying?
According to Anil Kumar Bhansali, Head of Treasury and Executive Director of Finrex Treasury Advisors LLP, the Indian currency is looking very weak amid the increasing tension in West Asia. He believes that unless crude oil prices come down to around $80 per barrel, the outflow of foreign capital may be higher than the government’s estimate, which will affect both the current account deficit and fiscal deficit.
He further said that the market is now waiting for the action of the Reserve Bank of India (RBI). According to him, unless some concrete steps are taken, we may see buying on falling rupee, while exporters may avoid selling dollars while waiting for improvement in oil prices.
For India, falling rupee directly means increasing pressure on inflation. In such a situation, if this decline continues despite all the efforts of RBI, then the central bank may have to take further steps regarding the repo rate.
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