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Rupee slips to 16-month low amid fresh cases of coronavirus in India

The rupee opened at 73.08 at the interbank forex exchange on Wednesday and gained further ground to the day's high of 72.90 against the American currency.

Rupa Burman Roy | March 4, 2020 | Updated 17:39 IST
Rupee slips to 16-month low amid fresh cases of coronavirus in India
The Indian rupee has overall fallen 2.8% since the beginning of the year 2020

Extending decline for the third straight session, rupee on Wednesday turned volatile and slipped further after the government confirmed fresh cases of coronavirus in India. The local currency ended at 73.22 against the US dollar, down 11 paise against its previous close of 73.29.

The local unit reversed the trend to red after the official announcement by the government of 15 new cases of coronavirus, taking the total number of infected to 28. Following the news, domestic equity, as well as the currency market, fell to bearish grounds.

The rupee opened at 73.08 at the interbank forex exchange on Wednesday and gained further ground to the day's high of 72.90 against the American currency.

Post the update, the domestic currency weakened past 73.50 per US dollar for the very first time since November 1, 2018, and hit its 52-week low value of 73.63 by the afternoon session.

With today's fall, the local unit has declined 1.5% in the last three sessions of straight fall. The Indian rupee has overall fallen 2.8% since the beginning of the year 2020.

In the previous session, the Indian rupee fell almost 47 paise to close at a 16-month low of 73.19 against the US dollar amid concerns over the impact of coronavirus. This was despite apex regulator Reserve Bank of India saying it was closely monitoring global as well as domestic situation and was ready to take necessary action to ensure the orderly functioning of financial markets.

Additionally, the current volatility in domestic grounds has also triggered outflows by foreign institutional investors. Foreign institutional investors (FIIs) have remained outright net sellers in the capital market for the current week, as they sold equity shares worth Rs 2,415.80 crore on Tuesday and Rs 1,354.72 crore on Monday.

Sustained foreign fund outflows coupled with global concerns over the impact of coronavirus pandemic has turned investor sentiments fragile. Rising crude prices and strengthening of the American currency also weighed on the local currency.

Globally, the fatalities from coronavirus have risen to 3,123, with over 93,000 confirmed cases spread across 80 countries.

On the back of falling Indian currency, IT stocks traded higher, with Tech Mahindra, Wipro and Tata Consultancy Services closing at a gain of around 2.2%-2.3% and Infosys ending almost 1.5% higher.

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