The rupee fell 36 paise on Wednesday to end at an over-seven-week low of 60.39 against the dollar as the growing unrest in Iraq pushed crude oil prices up.
A sharp fall in local equities amid a slowdown in capital inflows also had a negative impact, said dealers.
As militants attacked Iraq’s largest oil refinery, global crude oil prices surged and Brent for August settlement increased 1 cent to $113.46 a barrel on the London-based ICE Futures Europe exchange. As a result, importers, mainly oil refiners, went on a dollar buying spree.
At the Interbank Foreign Exchange (Forex) market, the rupee opened lower at 60.28 and moved erratically in a wide range of 60.06 and 60.54 before settling at 60.39, a net fall of 36 paise or 0.60 per cent. Wednesday’s close was the weakest since April 29.
The impact was also felt on the bourses, with the BSE Sensex plummeting 274.94 points, or 1.08 per cent. Pramit Brahmbhatt, Veracity Group CEO, said: “The rupee lost more than half a per cent taking cues from local equities. Iraq also worried investors.”