Rupee slides 53 paise to settle above 76 mark amid meltdown in equities : Business News

Mumbai: The rupee settled 53 paise lower at 76.13 against the US dollar on Friday amid a significant rise in coronavirus cases in the country and weak domestic equities. Forex traders said heavy selling in domestic equities dragged the local unit amid mounting fears of a coronavirus-led economic slowdown. Moreover, strengthening of the American currency in the international market also weighed on the domestic currency. At the interbank foreign exchange market, the rupee opened at 75.97. During the day, it lost further ground and finally settled at 76.13, down 53 paise over its previous close.

The rupee had settled at 75.60 against the greenback on Tuesday. Forex markets in India were closed on April 1 for the annual closing of banks and on April 2 on account of Ram Navami. On a weekly basis, the currency has depreciated by 124 paise. "Rupee remained under pressure following broad strength in the dollar and as FIIs continue to remain net sellers in the equity and debt segment," said Gaurang Somaiyaa, Forex & Bullion Analyst, Motilal Oswal Financial Services. Somaiyaa further said that "from the US, market participants will be keeping an eye on non-farm payrolls data and a weaker-than-expected economic number could keep gains capped for the currency."

Forex traders said the decision to reduce trading hours for currency and government securities markets will lead to increase volatility. The forex market will remain closed on Monday (April 6) on account of Mahavir Jayanti. The Reserve Bank of India has reduced the timing of market hours for call money market, government securities market, currency market from April 7 to April 17 following the unprecedented situation that has emerged due to the spread of coronavirus. The markets will now be open between 10 am and 2 pm. "The reduction in over-the-counter (OTC) timings will disappoint the speculators and also reduce the volumes. Reduction in volumes will impact the market liquidity and likely increase volatility keeping rupee on an edge.

We may see RBI intervening and capping the volatility however, there is not much RBI can do," said Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services. According to Sugandha Sachdeva, VP-Metals, Energy & Currency Research, Religare Broking, "the overall trend remains skewed on the downside, amid the uncertainty as to how long this pandemic will last and a convincing breach of the crucial level of 76.25 would further accentuate the fall in rupee towards 77.50 mark." The number of confirmed coronavirus cases around the world has soared past one million. In India, the tally of confirmed coronavirus cases has crossed the 2,300-mark. The dollar index, which gauges the greenback''s strength against a basket of six currencies, rose by 0.53 per cent to 100.70.

Global crude oil benchmark Brent rose 10.15 per cent to USD 32.98 per barrel amid concerns over global growth. On the domestic equity market front, the 30-share BSE barometer ended 674.36 points or 2.39 per cent lower at 27,590.95. The NSE Nifty shed 170 points, or 2.06 per cent, to finish at 8,083.80. Foreign institutional investors (FIIs) sold equities worth Rs 1,116.79 crore in the Indian market on Wednesday, as per provisional data. The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 75.3859 and for rupee/euro at 83.0496. The reference rate for rupee/British pound was fixed at 93.0760 and for rupee/100 Japanese yen at 69.65.