Rupee at 19-month low, gold dips further

The Indian rupee continued its plunge, hitting a 19-month low against the dollar on Wednesday.
This means one Omani rial at the current level fetches above 178 rupees.
Reports indicate the rupee had been under intense pressure, having lost 6.7 per cent to the greenback until Tuesday.
The rupee closed at 68.60, down 36 paisa, against the greenback on Wednesday amid trade war tensions and rising crude prices.
“The present free fall the Indian rupee is currently witnessing is mainly due to the rise in international prices of crude,” said Madhusoodanan, General Manager of Global Money Exchange.
Brent crude prices rose more than 2 per cent on Tuesday 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 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 a further drop with the price of 22k gold dipping to almost RO 15.400 per gram.
“The dip in gold rates will definitely encourage customers to revisit the shops to buy more jewellery,” said Najeeb K, Regional Head of Malabar 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 attractive and investors should take this dip as a buying opportunity,” opined Najeeb.
Rajesh Govindan, Managing Partner of Cochin Gold, said there has not been any substantial rise in the sales as many people are on leave thanks to the summer vacation.
“The sales pattern remains the same during this season every year despite changes in the prices. Also customers have done a lot of purchases during the recent Eid festival,” he said.