The Indian rupee reversed all the gains made earlier in the day to close at an all-time low of 71.21 per dollar on Monday, tracking a weak trend in some other global currencies along with concerns of a wider trade deficit and high oil prices.

On Friday, it had settled at 70.99-71, 25 paise weaker than its previous close.

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High oil prices along with outflow of foreign fund from the equity and bond market led to the rupee’s decline, said Anindya Banerjee, Deputy Vice President for Currency and Interest Rates with Kotak Securities.

According to provisional data from stock exchanges, foreign institutional investors sold scrips worth Rs 21.13 crore on Monday.

Edelweiss Securities’ Head of Forex and Rates Sajal Gupta said there was no intervention by the Reserve Bank of India (RBI) during the day. The RBI can intervene by selling dollars to stabilise a weakening rupee.

A Central government official, however, recently said that the slide in the rupee is a short-term volatility and there is no need to be alarmed.

Principal Economic Adviser to the Union Finance Ministry Sanjeev Sanyal had told IANS that if one takes the long-term view, the rupee is not depreciating against most world currencies and that in fact it is a case of strengthening of dollar rather than weakening of rupee.

Petrol, diesel hit fresh high

Prices of petrol and diesel, already at unprecedented levels in the country, rose for the ninth consecutive day on Monday.

In the national capital, petrol was sold at Rs 79.15 per litre, up from Rs 78.84 on Sunday.

In Kolkata, Chennai and Mumbai, the fuel was priced at Rs 82.06, Rs 82.24 and Rs 86.56 per litre respectively, all a new record, against Rs 81.76, Rs 81.92, Rs 86.25 on Sunday.

The surge in fuel prices is largely attributed to the rise in crude oil prices and high rate of excise duty in the country. Brent crude oil is currently priced over $78 per barrel.

The recent slump in rupee also has lifted the import cost of crude oil, subsequently raising fuel prices.

On Monday, the key transportation fuel was sold at Rs 71.15, Rs 74, Rs 75.19 and Rs 75.54 per litre in Delhi, Kolkata, Chennai and Mumbai respectively, up from Rs the previous levels of Rs 70.76, Rs 73.61, Rs 74.77 and Rs 75.12 per litre.

Diesel prices gain significance as the fuel is used in the transportation of farm products and a rise in the prices may puah up inflation.