Rupee slides 70 paise to record low of 76.34 against dollar

The rupee plunged by 70 paise to its life-time low of 76.34 against the US dollar on Wednesday as a rise in coronavirus cases in the country fanned fears of the government extending the lockdown to contain the pandemic.

Forex traders said rising Brent crude prices and a firm US currency also weighed on the local unit.

At the interbank foreign exchange, the rupee opened weak at 75.83 and lost further ground to settle at 76.34, registering a fall of 70 paise over its previous close. On Tuesday, the rupee had settled at 75.64 against the US dollar.

"Rupee continued its weak trend after some respite yesterday. USD-INR pair in offshore market traded higher on Wednesday tracking the spike in spot pair due to rising case of coronavirus in India amid a strong greenback which is now trading again above 100 mark," Jateen Trivedi, Senior Research Analyst (Commodity & Currency) at LKP Securities commented.

Domestic stocks declined on Wednesday as investors remained jittery on concerns over the Covid-19 pandemic. BSE Sensex ended 173.25 points or 0.58 per cent lower at 29,893.96 while the broader NSE Nifty closed 43.45 points, or 0.49 per cent, down at 8,748.75.

The Reserve Bank of India (RBI) has reduced the timing of market hours for call money market, government securities market and currency market from April 7 to April 17 (from 10 am to 2 pm) following the unprecedented situation that has emerged due to the spread of coronavirus.

Traders said investor sentiment remains fragile amid concerns over the impact of coronavirus outbreak on the domestic as well as the global economy.

There are more than 14.30 lakh declared cases of coronavirus worldwide. In India, the tally of confirmed coronavirus cases has crossed the 5,000-mark.

"The Indian rupee also fell sharply against the US dollar, following cues from other Asian currencies. Besides, weak global risk appetite and higher dollar index weighed on the rupee," Devarsh Vakil, Head - Advisory (PCG), HDFC Securities said, adding that technically, "spot USDINR is having resistance at 76.54 and support at 75.45".

The dollar index, which gauges the greenback's strength against the basket of six currencies was trading 0.25 per cent up at 100.15.

Trivedi of LKP Securities noted that the decline in rupee was largely due to "likely overseas outflows from local stocks amid oil importers buying and a strong greenback".

Foreign institutional investors (FIIs) were net buyers in the capital markets, as they bought shares worth Rs 741.77 crore on Tuesday, according to provisional data.

Brent crude futures, the global oil benchmark, rose 0.06 per cent to USD 31.89 per barrel.

The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 75.8438 and for rupee/euro at 82.1328. The reference rate for rupee/British pound was fixed at 93.1685 and for rupee/100 Japanese yen at 69.68.

"Rupee fell in the latter half of the session as domestic equities came under pressure and ahead of inflation and IIP number.

"Expectation of weaker number could continue to weigh on the overall market sentiment. Also, surge in coronavirus cases reported in India is putting pressure on the currency. We expect the rupee (spot) to quote in the range of 75.70 and 76.50," said Gaurang Somaiyaa, Forex & Bullion Analyst, Motilal Oswal Financial Services.