The Indian rupee fell in early trade today as brent crude oil price rose over 1% to $81 per barrel amid increasing demand for dollars from importers.
The currency opened at 73.80, down 23 paise from its previous close of 73.57 compared to the American dollar. It was trading 30 paise lower at 73.87 in early trade.Brent crude oil prices which came under pressure last week on lowering of global growth forecast by IMF rose to $81.44 putting pressure on the home currency.
Oil prices rose amid uncertainty of events after US President Donald Trump has vowed "severe punishment" if oil-rich Saudi Arabia was behind the disappearance of its dissident journalist Jamal Khashoggi who is feared killed at the kingdom's consulate in Turkey.
His remarks came amid mounting pressure as reports coming out of Turkey suggest that Khashoggi was brutally killed by Saudi officials inside their consulate in Istanbul.
Khashoggi, 59, a Washington Post contributor, had gone there to collect some papers for his marriage.
Saudi Arabia is facing increasing international pressure to clarify what happened to Khashoggi, a Washington Post columnist, with US President Donald Trump and British Foreign Secretary Jeremy Hunt among those demanding answers.
On Sunday, Saudi stocks dived 7% in early trading amid international pressure over the disappearance of its dissident journalist.
India is 81 per cent dependent on imports to meet its oil needs and is the third-largest importer of crude after US and China.
Since payment of crude oil prices is done in dollars, a higher crude rate leads to more amount of rupee being converted to dollar, thereby strengthening the US currency.
Crude prices crossed the $86 per barrel mark last month triggering a fall in home currency. The rupee fell to its all time-low of 74.48 on Thursday last week when Sensex crashed over 1,000 points intra day on global markets tumbling on decline in US markets.
On Friday, the rupee strengthened by 55 paise to settle at 73.57 against the US dollar, marking its biggest gain in over three weeks as global crude prices eased and domestic indices staged a smart rebound.