Rupee crashes heavily; Omani Rial crosses record 250 rupee mark

Muscat: The Indian rupee plunged sharply on Monday amid escalating global economic uncertainty and rising crude oil prices, pushing the value of one Omani rial to a historic high of 250 Indian rupees for the first time in the foreign exchange market. The steep fall in the rupee came as the US dollar continued to strengthen globally during the ongoing West Asian crisis and mounting pressure on emerging market currencies.

With the rial surging against the rupee, major exchange houses in Oman witnessed a rush of expatriates sending money back to India. Exchange centres in Oman were trading one rial at around Rs 249. The rupee reportedly opened at 96.07 against the dollar and closed weaker at 96.36 in forex trading. Financial experts warned that the continuing Gulf tensions and global instability were reducing the chances of any immediate recovery for the Indian currency.

The weakening rupee is expected to hit ordinary Indians hard by sharply increasing import costs. India imports more than 85 per cent of its crude oil requirements, and the rise in global oil prices beyond 110 dollars per barrel has significantly increased the country’s dollar demand. Economists warned that the rising import bill could fuel inflation by increasing the prices of fuel, food products and other essential commodities.

The crisis is also expected to make foreign travel, international flight tickets and overseas education far more expensive for Indian families. At the same time, foreign portfolio investors have reportedly been pulling out large amounts of money from Indian stock and bond markets, converting rupee holdings into dollars and accelerating the currency’s fall.

Experts said the Reserve Bank of India may continue emergency interventions to slow the rupee’s collapse, but persistent global tensions and the strengthening US dollar remain major threats to currency stability.