The rupee tumbled to a new low against the dollar in the midst of an increase in crude oil price

The Indian rupee slipped into a fresh low today and extended losses against the US dollar. The Indian currency has depreciated to 78.92 vs US dollar in early trade today. On Tuesday, the rupee had plunged by 48 paise to close at 78.85 against the US dollar, weighed down by persistent foreign capital outflows and a surge in crude oil prices. Domestic equities were weak today, tracking lower global markets because of the sharp pullback noticed in the US equities last Friday.

Oil prices dipped slightly today but were still $117.37 a barrel, after rising in the previous three sessions. Losses were limited to the view that global supply tightness will continue as there is limited room for major producers such as Saudi Arabia to boost production. India imports more than two-thirds of its oil requirements, and higher crude prices add to the country's trade and current account deficits (CAD) and hurt the rupee by pushing up imported inflation.