The Indian rupee today fell to 73.63 at day's low before pulling back to close 7 paise higher at 73.22. In comparison, the rupee had closed at 73.29 in the previous session. Some analysts expect the rupee to fall closer to 75 against the US dollar amid weak investor sentiment as coronavirus cases increased in the country.

“I don’t see much respite from the selling pressure in the near-term," said Prakash Sakpal, an economist at ING Groep NV in Singapore, according to Bloomberg. The dollar-rupee pair has moved to a higher trading range of 72-75, he said.

Rushabh Maru, research analyst at Anand Rathi Shares and Stock Brokers, expects rupee to remain under pressure and weaken gradually to 74.20-74.50 levels against the US dollar.

"There is also concern that the rapid spread of coronavirus in many countries could hurt global economic growth. Focus will now shift to the RBI. But as inflation is currently above the RBI's comfort zone, it will be difficult for the RBI to cut interest rates immediately," he added.

Some analysts attributed today's pullback of the rupee to Reserve Bank of India's intervention at lower levels. The RBI intervened in the currency market which helped the rupee recover from 73.62 to 73.22, said Shrikant Chouhan, senior vice-president at Kotak Securities.

India has so far reported 28 positive coronavirus cases, which includes 15 Italian tourists. The rupee may fall to as low as 75 per dollar, surpassing the record low hit in October 2018, according to economists of ING Bank NV, as cited by Bloomberg.

In terms of technicals, Jateen Trivedi, senior research analyst at LKP Securities, said that going ahead 73.60-73.75 will play minor resistance as some profit booking will be seen at these levels as charts suggest overbought positions.

"The panic of coronavirus plays into our domestic market as well as the global front which has forced the funds outflows," he added.

Selling of Indian assets by overseas investors has weighed on the rupee in recent days.

Foreign portfolio investors have sold domestic equities and debt to the tune of $500 million and debt $400 million respectively in March so far, says forex advisory firm IFA Global, adding that the reaction of the RBI will be interesting to see amid the volatility in the rupee.

Indian equities, which had rallied in the previous session on hopes of a coordinated effort by major central banks to combat the economic fallout of the virus, were pressured today amid the increasing cases of coronavirus cases in the country.

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