Rupee Declines 7 Paise As Corona Virus Scare Grips Asian Currencies

The rupee depreciated by 7 paise to close at 71.26 against the US dollar on Thursday as the spread of a deadly new virus from China stoked fears of a global pandemic. However, softening crude prices and strong domestic equity market restricted the rupee’s fall, forex dealers said. At the interbank foreign exchange market, the local currency opened on a weak note at 71.21.

During the day, it swung between a high of 71.16 and a low of 71.35. The Indian currency finally settled at 71.26, registering a loss of 7 paise over the previous close. “USD/INR Pair traded in range of 71.20 - 71.30, as markets looks out for new triggers rupee keeps trading in range but with weak bias due to corona virus being spread in China, which can dampen investment infusion.

Rupee can be range of 71.20-71.35 in coming sessions,” Jateen Trivedi, Senior Research Analyst (Commodity & Currency) at LKP Securities said. Investor remained anxious over the spread of a deadly new virus from China as it is big export market for many countries. More than 570 people have been infected with the corona virus.

“In the last couple of sessions most Asian currencies were weighed down as the spread of a flu-like virus in China stoked fears of a global pandemic. Euro rose ahead of the important ECB policy statement that will be released today; expectation is that the central bank could hold rates unchanged. We expect the USDINR (Spot) to quote in the range of 71.05 and 71.50,” Gaurang Somaiyaa, Forex & Bullion Analyst, Motilal Oswal Financial Services said.

Global crude benchmark Brent was trading 1.46 per cent down at USD 62.29 per barrel. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.03 per cent to 97.49. The BSE Sensex settled 271.02 points, or 0.66 per cent, higher at 41,386.40.

Likewise, the broader NSE Nifty closed 73.45 points, or 0.61 per cent, down at 12,180.35. The 10-year Indian government bond yield was at 6.63 per cent. In the fourth special open market operation (OMO) auctions, the Reserve Bank of India on Thursday bought Rs 10,000 crore worth of long-term securities and sold Rs 2,950 crore worth of short-term government bonds.