Among other things, the oil industry is also hit by the coronavirus outbreak in a bigger manner than most realize, which in turn is having a major impact on the Indian currency rate. The impact of crude oil on currency is so massive that the rupee which had opened on 72.09 on 2nd March fell to a record low of 74.5075 recently, a loss of over INR 2 in this month itself. But how can the rupee get a major hit due to crude oil prices? And the bigger question is how to make up for the losses when going for money exchange? The simple answer is to book currency exchange with BookMyForex

Starting with the bigger question:>

If you’re looking for foreign currency exchange at this time when the rupee is plunging, look no further than BookMyForex. On this platform, you get the ability to lock-in the rate at its lowest and keep it locked for as much as 3 days at a nominal and refundable price. Even if you decide to go for the live rate. The site has 100s of channel partners and offers you the best forex rates quoted among them. This RBI authorized firm has many testimonials and positive reviews to its credit, making it one of the most trusted and reputed places for your foreign exchange needs.

Coming now to the other important question, how did rupee take a major hit due to crude oil prices:

The virus that led to economic instability globally also forced the demand of crude oil down in the market. This isn’t all. As an aftermath of Saudi-Russia war over crude oil, Saudi slashed the oil prices sharply, driving down the oil prices further. From $50 a barrel, the oil trade price has now plunged to around $30 a barrel.

The sudden and unexpected drop in oil prices has led some nations like India to leverage the situation. The domestic oil firms here immediately limited their medium-term requirement by buying in the future oil markets. While also covering their corresponding dollar need in the domestic spot markets to be completely hedged, which led to a rise in their dollar demand. The rise in dollar demand also led to the demand for FPI (Foreign Portfolio Investment) repatriating their funds, thereby making for a large dollar deficit in the dollar supply in the domestic market. Consequently, the rupee fell sharply. The sharp price drop in oil has thus proven to be a boon for the Indian authorities and domestic oil firms. Not so much for the value of rupee though.

RBI is now acting to ease out the dollar deficit in the markets by selling dollars in the spot markets. However, if the FPI’s keep selling in the equity markets and repatriate the money and oil companies to limit their crude requirements as prices fall, RBI will have to be more aggressive. As of now RBI has a large forex reserve and enough power to support the rupee against this speculative and commercial dollar demand.

Author's Bio: 

BookMyForex is the World’s first online marketplace for currency exchange and international remittance