Indian rupee falls to all-time record low against greenback
The dollar-rupee April contract on the NSE was at 76.72 in the previous session.
The currency opened 30 paise lower at 76.74 per dollar against Wednesday’s close of 76.44. The Indian currency continued to tumble on Thursday as it touched a fresh all-time low of 76.82 per dollar.
According to analysts, the weakening of the rupee came on the backdrop of broader strengthening of the greenback and subdued equity markets.
Equity and currency markets are subdued due to the bleak economic outlook both for India and the global economy amid the coronavirus pandemic
International Monetary Fund’s World Economic Outlook (WEO) report recently released by Chief Economist Gita Gopinath expects presents a dark picture of the world with the global economy shrinking by 3 per cent this year. Further, with the extension of the nationwide lockdown till May 3, a Barclays report has projected that India’s GDP will stagnate and not grow at all during the calendar year 2020.
On Thursday, the BSE Sensex opened in the red and is currently trading at 30,284.81, lower by 95 points or 0.31 per cent. The NSE Nifty50 was at 8,897.40, lower by 27.90 points or 0.31 per cent from its previous close.
The dollar-rupee April contract on the NSE was at 76.72 in the previous session. The open interest has declined almost 7 per cent during the session. The rupee failed to show signs of any appreciation and moved to life-time lows despite the recent recovery.
Nifty ends near 9K, Sensex gains 222 points; Nifty Bank up nearly 2 per cent. The Indian equity market pared major losses to trade on a flat-to-negative note, as weakness continued across global stock markets.
The BSE sensex fell over 300 points during the initial trade to touch an intra-day low of 30,016.17 points. Around 11.05 am, it was trading at 30,311.57, lower by 68.24 points or 0.22 per cent from its previous close of 30,379.81. It had opened at 30,095.51 and has so far touched an intra-day high of 30,473.84 points.
The Nifty50 on the National Stock Exchange (NSE) was trading at 8,919.45, lower by 5.85 points or 0.07 per cent from its previous close.
The investor sentiments have been weak off late due to the near standstill in the economy on the back of the coronavirus crisis and the nationwide lockdown. Further, bleak outlook of both global and Indian economy has also weighed on the investor sentiments.
Forex traders said the weakness in the rupee was largely due to strengthening of the US Dollar against a basket of currencies as investors fled to safe haven greenback amid weakening risk appetite in the markets.
At the interbank foreign exchange, the rupee opened weak at 76.75, and during the day lost further ground to settle at 76.87, registering a fall of 43 paise over its previous close.
During the session, the rupee moved between 76.68 and a low of 76.87 against the US dollar. On Wednesday, the rupee had settled at 76.44 against the greenback. “Risk aversion and flight to safety has returned in global markets. US treasury yields are lower, commodities and commodity currencies are weak, equities are weak and we are seeing broad USD strength,” said Abhishek Goenka, founder and CEO of IFA Global.
Other Asian currencies were also weaker against the US dollar today. The US dollar index, which tracks the movement of the greenback against six other major currencies, was up about 0.50% to 99.98.
Meanwhile, Indian stock markets moved higher today shaking off early weakness. Anindya Banerjee, DVP, currency derivatives and interest rate derivatives at Kotak Securities, said: “Indian rupee continues to weaken due to rising cases of COVID-19 in India. Global situation remains fluid as number of cases continue to risk in Europe and North America but in several nations, the rate of increase continues to slow, which is a positive development. All in all, rupee may continue to weaken, but some of these positive development in home and abroad may limit the pace of the decline. A range of 76.00-77.50 may unfold over the medium term.”
Agencies
