The rupee on Thursday declined by 10 paise to settle at a more than one-month low of 71.64 against the US dollar amid heavy selling in domestic equities and strengthening of the American currency in the overseas market.
Forex traders said investor sentiments remained fragile amid coronavirus fears and sustained foreign fund outflows. The death toll from the coronavirus epidemic in China has climbed to 2,118, while the overall confirmed cases increased to 74,576, Chinese officials said on Thursday.
At the interbank foreign exchange market, the local currency opened at 71.75. During the day, it lost ground and touched a low of 71.80 and finally settled 10 paise lower at 71.64 against the US currency, a level not seen since January 8. The rupee had settled at 71.54 against the US dollar on Tuesday. Forex market was shut on February 19, on account of Chhatrapati Shivaji Maharaj Jayanti.
“Indian rupee recovered early morning losses following Asian peers. Foreign fund inflows, dollar selling by state owned banks and stable crude oil prices also supported the rupee,” said V K Sharma, Head PCG and Capital Markets Strategy, HDFC Securities.
Sharma added the near-term bias for rupee is bearish amid stronger dollar vis-a-vis major trading currencies. On a weekly basis, the rupee lost 33 paise. “Despite a lackluster week, we saw an appreciation in USD/INR spot tracking some uncertainty over coronavirus along with sharp surge in dollar index and crude oil prices,” said Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services.