The rupee on Friday plunged by 63 paise to settle at nearly six-month low of 72.24 against the US dollar, tracking heavy sell-offs in equities and sustained foreign fund outflows on fears that coronavirus can wreak havoc on the global economy.
At the interbank foreign exchange market, the local currency opened lower at 71.90 to the US dollar and hit a low of 72.29 in day trade.
The domestic currency finally settled at 72.24, showing a loss of 63 paise — the biggest single-day loss since September 13, 2019. The closing level is the lowest since September 3.
“This week was all about coronavirus. The focus was on contagion to new regions outside China. The outbreak of virus rattled the risk appetite, giving rise to risks of sharp global economic slowdown,” said Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services. The virus has now spread around the globe prompting many governments issue advisories against travelling or gathering in crowded places.
An analyst observed that the coronavirus has definitely hit businesses and could have longer than anticipated effect on global growth and earnings. China reported 44 more deaths from the novel coronavirus epidemic on Friday and 327 fresh cases. The death toll now stands at 2,788 in mainland China, according to the National Health Commission.
“The panic selling of foreign investors in Indian equities has led to rupee depreciation. Now that the big hurdle of 72 is crossed in USDINR pair it can take 72.50 as next level on upside,” Jateen Trivedi, Senior Research Analyst (Commodity & Currency) at LKP Securities.
Continuing its downward spiral for the sixth straight session, the 30-share BSE Sensex ended 1,448.37 points, or 3.64 per cent, lower at 38,297.29.
