Oil price registers 9-month high; Re registers slide

Oil price registers 9-month high; Re registers slide

Iraq crisis fuels fear of oil supply disruption

Oil price registers 9-month high; Re registers slide

The domestic currency rupee ended weak on Friday, posting losses for a fourth straight week as high global crude prices oil prices jumped a near nine-month high posing a risk to the country's current account and inflation.

The local currency was seen trading flat during the day after initially opening on a weaker note. The losses in the rupee were restricted on account of a weak dollar index. The dollar-rupee pair was seen closing at 60.18 after making a high of 60.33 and a low of 60.14. 

The week saw the rupee trading in the range of 59.80-60.50 — shedding 0.7 per cent to the dollar — with the Iraq crisis being a major trigger.  It was the second-most weak currency in Asia after the Indonesian rupiah, which ended down 1.5 per cent on the week.

Commenting on the scene, India Forex Advisors' Founder & CEO Abhishek Goenka said: “Rupee was seen trading weak during the session taking cues from the soaring global crude prices as crisis in Iraq continued. This was seen adding to the fear of disruption of potential oil supplies from the key producer of crude.” 

Weakening of rupee to continue next week — due to month-end dollar demand from importers — as much as 61 per dollar unless the central bank aggressively steps in to protect the currency if global oil prices continue to stay high.

Meanwhile, Brent crude held near $115 a barrel on Friday, close to a nine-month high, and was headed for its second weekly gain on increased risks of disruption to supply from Iraq.  India imports nearly two-thirds of its oil needs, and is the world's fourth largest oil consumer.

The S&P BSE Sensex closed 96 points down at 25,105.51 points while the CNX Nifty ended 29 points down at 7,511.45 points. The broader markets also ended red as the BSE Mid-cap index shed 0.3 per cent, while the BSE Small-cap index underperformed and ended 0.66 per cent lower.