The rupee today fell sharply against the US dollar, weakening past the 76 per dollar mark for the first time. The rupee fell to a record low of 76.32 per US dollar, before closing at 76.29, against previous close of 75.19. The rupee today opened at 75.69 amid a broad strengthening of the US dollar against other major currencies. Domestic equity markets fell sharply today with Sensex crashing about 4,000 points, its biggest one-day fall ever amidst concerns about the increasing number of coronavirus cases in the country.

Sugandha Sachdeva VP-Metals, Energy & Currency Research, Religare Broking, said that the sentiments in the market are shaky and domestic currency is likely to face more heat going ahead. The rupee may head to lower levels of around 77 in near term, she added.

Selling of Indian stocks by foreign institutional investors has weighed on the rupee despite a sharp fall in global oil prices, which are down at $26.10 per barrel. Vinod Nair, Head of Research at Geojit Financial Services, said FIIs have also contributed to the downtrend in Indian markets, turning net sellers to the tune of around Rs. 48,000 crores in March till date.

Stimulus measures by central banks around the world to shield their countries from the economic fallout of coronavirus have not been enough to calm the markets, he added.

Anindya Banerjee, DVP for currency derivatives and interest rate derivatives at Kotak Securities, said: “Pandemic is causing widespread lockdowns, causing the economy to grind to halt. In such a situation, emerging market currencies are vulnerable due to their dependence on dollar debt. A scramble for dollars would continue as long as the panic lasts."

"The RBI would continue to sell dollars aggressively but that may not stop the bleed in rupee. Over the next couple of weeks, there is growing risk of USD-INR inching towards 78.00 levels on spot. Technically, USD-INR needs to respect 74.50 levels, previous all time high, to keep the bullish bias alive," he added.

The dollar rose against major currencies today as the worsening coronavirus crisis accelerated the flight to cash. Analysts say that uncertainty about the spread of the virus is likely to support the dollar in near term as investors have been liquidating positions in safe-havens, including gold, and other riskier investments to keep their money in dollars due to the uncertainty caused by the epidemic.

The coronavirus has now been reported in more than 100 countries and has claimed more than 13,000 lives. (With Agency Inputs)

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