Rising Oil Prices To Weaken Rupee

Rising global crude oil prices and consistent outflow of foreign funds from the Indian equity market is expected to further weaken the Indian rupee, an official said on Sunday.

According to Anindya Banerjee, Deputy Vice President for Currency and Interest Rates with Kotak Securities, the Indian rupee has been one of the worst performing currencies in the EM (emerging markets) basket. 

"Going forward, if oil prices continue to move higher, we can see rupee trade above 68 against the US dollar," Banerjee said. 

"Over the next week, traders will react to the Karnataka poll. If the BJP wins, then it can cause rupee to appreciate momentarily but the larger downtrend should not be altered. For the larger downtrend to reverse, oil prices have to decline."

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