Rupee falls to 19-month low, gold losing glitter

SAMUEL KUTTY

MUSCAT: The Indian rupee continued its plunge hitting a 19-month low against the dollar on Wednesday.

This means one Omani rial at current level fetches above Rs 178.

Reports indicate that the Indian rupee been under intense pressure, having lost about 6.7 per cent to the greenback till Tuesday.

It was trading at an intra-day 68.54, down 30 paisa, against the greenback on Wednesday amid trade war tensions and rising crude prices.

“The present free fall that the Indian rupee currently witnessing is mainly due to the rise in the international prices of crude”, said Madhusoodanan, General Manager of Global Money Exchange.

Brent crude prices rose more than 2 per cent on Tuedsday to climb back above the $76 per barrel mark as the US pushed allies to halt imports from Iran.

India imports 80 per cent of its oil requirements and higher oil prices risks widening India’s current account deficit.

“Any variation in trade deficit will affect the exchange rates of rupee. This is reflective from the rise in the crude prices as India has to shell out more dollars to buy oil”, he said.

A weak rupee against the dollar makes imports costlier. Some imports cannot be cut down such as oil, which can negatively affect India’s current account deficit.

Meanwhile, gold prices witnessed further drop with the price of 22k gold dipping to almost RO 15.400 per gram.

“The dip in the gold rates will definitely encourage customers to revisit the shops to buy more jewellery”, said Najeeb K, Reagional Head of Malabal Gold and Diamonds.

The bullion has taken a beating from a stronger US dollar and decline in demand from gold consumers in India and China.

“The outlook on gold for the rest of the year is still very bullish and investors should take this dip as a buying opportunity,” said Najeeb.

Rajesh Govindan, Managing Partner of Cochin Gold said there has not been substantial rise in the sales as many people are on leave thanks to the summer vacation.

“The sales pattern remains the same during every year during the season despite the changes in the prices. Also customers have done a lot of purchases during the recent Eid festival”, he said.

Meanwhile, gold prices witnessed further drop with the price of 22k gold dipping to almost RO 15.400 per gram.

“The dip in the gold rates will definitely encourage customers to revisit the shops to buy more jewellery”, said Najeeb K, Reagional Head of Malabal Gold and Diamonds.

The bullion has taken a beating from a stronger US dollar and decline in demand from gold consumers in India and China.

“The outlook on gold for the rest of the year is still very bullish and investors should take this dip as a buying opportunity,” said Najeeb.

Rajesh Govindan, Managing Partner of Cochin Gold said there has not been substantial rise in the sales as many people are on leave thanks to the summer vacation.

“The sales pattern remains the same during every year during the season despite the changes in the prices. Also customers have done a lot of purchases during the recent Eid festival”, he said.