Emerging currencies fell on Monday as the American greenback built on last week’s gains and hit a 16-month high, while oil prices rose after Saudi Arabia announced plans to slash production in December.
The Indian rupee was trading at 72.89 against the US dollar as of just after 15.00 GMT, climbing up from the 72.50 seen on Friday, according to data from Bloomberg.
The crisis-hit currency reached an all-time high of 74 earlier last month.
While in Turkey, the lira reached 5.45 against the US dollar, creeping up from the 5.31 seen last week.
Stephen Innes, head of Asia Pacific trading at Oanda, said: “The recent rebound in oil prices is a reminder that it will become increasingly difficult for twin deficit currencies – rupee, rupiah and peso – to smooth currency volatility via rate hikes without hurting the economy, and through interventions without depleting reserves.”
But it was good news for Russia, as the bounce in oil prices lifted the nation’s currency and stocks.
The rouble was up 0.6 percent and the Moscow stock exchange index climbed by 0.5 percent aided also by a delay to the imposition of US sanction on aluminium giant Rusal.
Vladimir Miklashevsky, a senior economist at Danske Bank, said: “Oil is improving sentiment for the rouble today but there is also another driver for the rouble – Rusal sanctions.
“Some deadlines were extended by U.S. authorities. And we are not seeing any other negative news related to sanctions.”
Oil prices soared in Asia today after the announcement from Saudi Arabia, the world’s largest oil exporter who will cut its shipments by half a million barrels per day in December due to seasonal lower demand.