The rupee is down over 7% against the US dollar so far this year
Traders said investor sentiments remain fragile amid concerns over the impact of coronavirus outbreak
The Indian rupee today fell to a new record low against the US dollar, despite strong traction in domestic equity markers. The rupee today opened at 76.09 before sliding to a record low of 76.55 against the US dollar. But later the rupee pulled back to finish at 76.29, as compared to its previous close of 76.34 against the US dollar in the previous session. Traders said investor sentiments remain fragile amid concerns over the impact of coronavirus outbreak on the domestic as well as global economy.
In India, over 5,700 coronavirus cases have been reported so far while globally the number has surged above 15 lakh. The Sensex today rose above 1,200 points points higher in early noon trade. Foreign institutional investors (FIIs) on Wednesday bought equity shares worth ₹1,943 crore.
“The pace of depreciation in rupee has weakened due to lower rate of outflows and increased intervention from RBI. Over the next few weeks, the key data to watch will the infection curve of Covid-19, followed by any signs of whether second wave is emerging in China or not. If the curve continues to flattens across the globe, then it will help Rupee recover lost ground. Otherwise, Rupee can continue to inch towards 77.50 levels," said Anindya Banerjee, DVP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities.
The US dollar was flat against key global currencies with the dollar index trading a 100.17.
Weighing on the rupee, oil prices today extended gains as the world’s top oil producers appeared to be moving closer to a deal to curb output. Brent for July delivery added 0.4% to $32.97 a barrel.
"The most important event to look forward to today would be the meeting between OPEC and OPEC+ to discuss production cuts. India is looking to bolster its strategic petroleum reserves to take advantage of low crude prices," said Abhishek Goenka, founder and CEO, IFA Global.
"Today there is a G-Sec auction of ₹19,000 crore. The cutoffs will be interesting to watch. The next State Development Loans auction is on Monday. The spread of G-Sec over repo and that of SDLs over G-Secs has reached alarming levels on concerns about imminent fiscal slippage," he added.