mumbai the rupee fell to a historic low on monday while bond yields surged as a sharp rise in global prices of crude oil stirred concern about domestic inflation strengthening prospects of interest rate hikes by the central bankindia imports more than twothirds of its oil needs high prices are likely to widen the countrys trade and current account deficits and boost imported inflationthe partially convertible rupee ended at 7696 against the dollar just off its record low of 7697 hit earlier in the session it closed friday at 7616the rupee struck its previous record low of 769050 on april 22 2020 amid the covid19 pandemicbrent crude soared to near 130 a barrel its highest since 2008 as the united states and european allies mulled a russian oil import ban while delays in the potential return of iranian crude to global markets fuelled tight supply fearsthe fall in local shares also further added pressure on the rupee as foreign investors continued to dump riskier assets latest data showed foreign investors had sold 86256 million worth shares on thursday taking the total sales in 2022 to 1125 billionstocks continued to trade in the red and we saw sustained selling by foreign funds though rbi was likely selling dollars sporadically they wouldnt want to come in too heavily against the tide a senior trader at a foreign bank saidthe reserve bank of india typically sells dollars via staterun banks to prevent sharp moves in the rupee with forex reserves at 63153 billion by early march traders feel it has enough firepower to avert a much sharper fall in the currencythe key concern however is whether the rbi will be forced to act to contain inflation by raising interest rates in the aftermath of the ukraine crisisso far the rbi has reiterated its commitment to reviving economic growth and keeping policy accommodativelast week economists and analysts said indias trade and current account deficits were likely to widen putting pressure on the rupee as global oil prices surge and the domestic economy reopens from a third wave of the pandemicthe benchmark 10year bond yield ended trading at 689 up 8 basis points on the day its biggest singlesession rise since the selloff on budget day on feb 1 when the government announced a sharply higherthanexpected market borrowinginvestors will closely monitor the global geopolitical situation as well as results of the state elections due to be announced on march 10 for further directiona reversal of the recent losses will be seen only if spot usdinr pair breaks below 7650 the pair will have upside targets of 77307752 levels until support holds analysts at emkay global financial services wrote in a note