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Rupee worst performer this year, may fall to 73 on Kashmir tensions

India's rupee has gone from being the best-performing Asian currency last quarter to the worst this year as rising crude prices and tensions over Kashmir weigh on sentiment.

Bloomberg 

Rupee settles below 70 after three months, crude oil slides further

India’s has gone from being the best-performing Asian currency last quarter to the worst this year as rising prices and tensions over weigh on sentiment.

ALSO READ: Rupee could weaken past 75 if Modi fails to win second term: Expert

The currency has slumped 2.4 percent since the end of December, missing the rally in its regional peers on optimism over U.S.-China trade talks. It weakened to 71.515 per dollar Monday, from as strong as 69.23 in early January.

“The risk for the India story, which is keeping the dollar well bid vis-a-vis rupee, is higher oil, followed by tensions and the political uncertainty,” said Ashish Vaidya, head of trading at DBS Bank Ltd. in Mumbai. “If the negative factors are sustained, for instance, if the situation worsens, the could soon touch 73.”

The rupee’s losses have deepened in recent days amid escalating tensions between India and following a by a Pakistan-based group of Islamic extremists in Kashmir last week.

oil has surged more than 20 percent this year as Saudi Arabia and Russia pledged to expand their output cuts and on concern U.S. sanctions against Venezuela and Iran will exacerbate a tightening of supply.

First Published: Mon, February 18 2019. 14:23 IST
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