Mumbai: India's rupee and sovereign bonds slid after a drone attack on Saudi Arabia's oil facilities sent global crude prices soaring by the most on record.
The rupee fell 0.9% to 71.5625 per dollar and the benchmark 10-year bond yields climbed nine basis points to 6.73%. Nifty 50 Index futures fell 1% in Singapore.
Remittance rates from UAE
Indians sending money to their home country stand to gain 15 paise per UAE dirham Monday, compared to the rates on Sunday.
UAE exchange live remittance rates from UAE showed Rs19.40 for one UAE dirham at 8.45am on Monday. The rate was 19.25 the previous day.
Rates of Philippines Peso and Pakistani rupee remain unchanged.
Why India is vulnerable to surge in oil prices
India imports more than two-thirds of its fuel needs, mostly from the Middle East, making it one of the most vulnerable in the region to a surge in oil prices. The spike come even as benign inflation and a slowing economy has led traders to bet the central bank will add to four rate cuts this year at its meeting in October.
"Current-account deficit economies, which are oil importers, will fare worst," said Khoon Goh, the Singapore-based head of Asia research at Australia & New Zealand Banking Group. "In this regard, INR, IDR and PHP are likely to underperform. USD/INR, after having fallen below 71 last week, is likely to test 72 again if oil prices stay elevated."
The increased geopolitical risk concerns overshadows the measures Finance Minister Nirmala Sitharaman announced over the weekend to revive economic growth from a six-year low. The government's third set of steps in four week include a tax refund program for exporters and a funding window for affordable housing to revive stalled projects.
Brent soared 10% and crude traded in New York added 9% after the world's largest oil exporter lost about 5.7 million barrels per day of output Saturday following the attack. For oil markets, it's the single worst sudden disruption ever, surpassing the loss of Kuwaiti and Iraqi petroleum supply in August 1990, when Saddam Hussein invaded his neighbor.