Rupee falls 7 paise against US dollar as crude oil surpasses $90 per barrel levels

The rupee continued its decline against the US dollar on Tuesday, falling 7 paise to 95.68 in early trade as high crude oil prices and steady demand for the dollar weighed on the currency.The rupee had already lost 19 paise in the previous session, closing on Monday at 95.61 against the dollar. It opened at 95.68 in the interbank forex market on Tuesday.Market participants pointed to rising oil prices as one of the key pressures on the rupee. Brent crude oil was trading above $91 a barrel, with futures rising 0.52% to $91.34 a barrel. Forex traders said higher crude oil prices were increasing demand for dollars tied to oil payments.The foreign exchange market was also hit by concerns over dollar inflows after the Reserve Bank closed the FCN(B) concessional foreign exchange swap facility earlier than expected.“The rupee opened lower as oil prices rose, the United States and Iran remained at odds over the Strait of Hormuz and there was no progress on a peace deal,” said Anil Kumar Bhansali, Treasury chief and managing director at Finrex Treasury Advisors LLP.The dollar remained practically stable against the main currencies; The dollar index, which tracks the evolution of the greenback against a basket of six currencies, stood at 99.63, 0.01% lower.Bhansali said the rupee could remain under pressure as crude oil prices have crossed $91 per barrel.“The rupee appears vulnerable to rising oil prices, which have remained near $90 and have now risen above $91 per barrel. The RBI was protecting near 95.61 on Monday and may be protecting 95.75 today, but will allow the depreciation to continue in view of rising oil prices and steady demand from oil companies,” he said.The currency weakness came alongside a subdued start for domestic stocks. Sensex was down 278.32 points at 77,450.64 in early trade, while Nifty fell 57.65 points at 24,230.45.Foreign institutional investors also remained sellers in the stock market, offloading shares worth Rs 2,535.10 crore on a net basis on Monday, according to exchange data.