Mumbai: The Indian rupee hit a five-month low against US dollar on Wednesday over concerns that rising oil prices may cause fiscal slippage and accelerating inflation.
The home currency closed at 65.31 a dollar -- a level last seen on 16 November 2017, down 0.49% from previous close. It opened at 64.99 and touched a high and a low of 64.98 and 65.31, respectively.
Crude oil surged past $71 a barrel as markets eyed an escalation of Middle East tensions after Europe’s air traffic control agency warned of possible air strikes on Syria in the next 72 hours, Reuters reported.
The government will issue Index of Industrial Production (IIP) data and CPI data on Thursday. According to a Bloomberg analyst estimates, CPI will be at 4.2% in March against 4.44% a month ago, and IIP to be at 7% for February, compared to 7.5% in January.
Traders are cautious as the Federal Open Market Committee will release minutes of its 20-21 March meeting on Wednesday, at which central bankers raised their target rate a quarter-point for overnight bank lending.
So far this year, the rupee has fallen 1.76%, while foreign investors have bought $1.97 billion and $755.40 million in equity and debt markets, respectively.
The 10-year bond yield closed at 7.542%, up 17 basis points, compared to its Tuesday’s close of 7.375%. In the last four trading sessions, bond yield gained over 40 basis points. Bond yields and prices move in opposite directions.