Rupee hits new low of 92.36 after tanker strikes roil oil

MUMBAI: The rupee hit a record low of 92.36 against the dollar on Thursday after attacks on oil tankers in the Strait of Hormuz pushed up crude prices, though the currency recovered to close at 92.19, down 15 paise from the previous session. It ended the session down 0.16%.

Brent crude futures rose to a peak of $101.6 per barrel before easing to around $96.9. The widening conflict in the region has triggered plans for a record release of strategic oil reserves to contain one of the largest fuel shocks since the 1970s.

Among currencies of major energy importing economies, the UK pound sterling has declined about 0.7% since the conflict began on Feb 28 and remains one of the better performers. The euro and the Korean won have fallen 2% to 3%, while the rupee and the yen have declined more than 1.5%.

Analysts say that if crude prices average around $80 per barrel, the challenge of funding the current account deficit could increase substantially and amplify currency volatility. Brent crude prices briefly moved back above $100 after strikes hit ships in regional waters and the ongoing conflict showed no signs of easing.

CPI data for Feb at 3.2% was marginally higher than the 3.1% forecast by analysts and an increase from 2.75% in the previous month. Recent developments include attacks on commercial vessels around Strait of Hormuz and near Basra. These incidents have intensified pressure on the Gulf region amid rising global energy concerns. Airstrikes in the conflict zone have continued for 13 days.