Crude oil spike sends rupee and bonds tumbling

Crude oil spike sends rupee and bonds tumbling

India’s rupee weakened to the lowest level in more than a month and bonds fell as a jump in oil prices once again exposed the nation’s vulnerability to spikes in energy costs.

The currency slid as much as 0.45 per cent to 69.67 per dollar in Mumbai, while the yield on most-traded bonds due in 2028 surged 5 basis points to 7.47 per cent. The S&P BSE Sensex index of equities lost 1.26 per cent.

“The surge in oil prices is the primary reason that is weighing on all asset classes,” said Harish Agarwal, Mumbai-based trader at FirstRand Bank Ltd. Elevated crude prices widen the country’s current-account deficit and stoke inflation, which muddies the outlook on interest rates, he said. Read More

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