INR vs USD: Rupee Declined 55 Paise To 93. 28 Against US Dollar Amid Crude Oil Price Spike

Rupee vs USD: The rupee opened 55 paise lower at 93.28 against the US Dollar on Monday, April 13, after a 8% surge in crude oil prices as a direct result of failed US-Iran ceasefire talks in Islamabad. 

Analysts had expected rupee to open between 93.10-93.20  to the US dollar today after the ceasefire appeared increasingly fragile

Meanwhile, Brent crude for June delivery climbed 7% to $102 a barrel, while U.S. equity futures and Asian shares fell. U.S. Treasury yields and the dollar rose, reversing last week's moves that had followed a U.S.-Iran ceasefire.

Following the breakdown in negotiations, the US President Donald Trump said on Sunday that the U.S. Navy would begin blockading the Strait of Hormuz.

"Not only does this restrain exports from Persian Gulf oil producers, it will restrict Iran's ability to export oil and will exacerbate the supply disruptions the market is experiencing," ANZ Bank said, citing a Reuters report. 

Also Read: IndiGo Shares Plummet Over 5% After Failed US-Iran Ceasefire Talks

Trump further warned that oil prices may remain elevatedthrough the U.S. midterm elections in November, a rare acknowledgement of the potential political fallout from his decision to attack Iran six weeks ago.

Prolonged high oil prices would be a concern for oil-importing India, stoking inflation worries, undermining the economic outlook and adding pressure on the rupee.

Beyond higher oil prices, the rupee faces the risk of reduced dollar inflows after banks completed the forced unwinding of arbitrage trades.

(With Agency Inputs)