Rupee Drops Below 76 Mark Against Dollar Amid Coronavirus Crisis

After starting the session 0.49 per cent (37 paise) lower at 75.97, the rupee weakened to as low as to 76.08 in the first half of the day.
Weakness in domestic equity markets also put pressure on the rupee, as benchmark indices S&P BSE Sensex and NSE Nifty dropped more than 1 per cent amid volatile trade following a positive opening. The domestic forex markets remained closed on the first two days of the month on account of the annual closing of banks and Ram Navami holidays respectively.
Crude oil prices fell 3 per cent on Friday, coming off their biggest one-day gains in the previous session, as doubts emerged about a deal between top producers Saudi Arabia and Russia to cut output. Brent crude futures - the global benchmark for crude oil - were last seen trading down 9 cents at $29.05 a barrel, after having soared 21 per cent on Thursday.
Analysts say the rupee is likely to stay weak along with other emerging market currencies until the coronavirus pandemic subsides.
"Lower crude prices have eased pressure on the rupee to some extent... A further rise in oil prices will have a negative impact on the rupee," Abhishek Goenka, founder and CEO of forex advisory firm IFA Global, told NDTV.
"Another 30-40 per cent surge in the crude price alongside weak appetite for riskier assets and a stronger dollar will increase the probability of break above 76.40 level."
According to a poll of market strategists and analysts by news agency Reuters, the rupee would strengthen 3.1 per cent to 74.00 against the dollar in a year.
It is forecast to trade at 75.55 per dollar by the end of April. Its path will largely depend on how successful the government's steps are in containing the spread of COVID-19.
Analysts say Reserve Bank of India interventions have prevented the rupee from falling further. The RBI cut interest rates on March 27 by 75 basis points - its biggest cut since 2009 - to 4.40 per cent, following 135 basis points of cuts in 2019. The RBI also announced targeted long-term refinancing operations to ensure market liquidity.
While there are more than one million declared cases of coronavirus worldwide, in India, the tally of confirmed cases has crossed the 2,000 mark.

After starting the session 0.49 per cent (37 paise) lower at 75.97, the rupee weakened to as low as to 76.08 in the first half of the day.
Weakness in domestic equity markets also put pressure on the rupee, as benchmark indices S&P BSE Sensex and NSE Nifty dropped more than 1 per cent amid volatile trade following a positive opening. The domestic forex markets remained closed on the first two days of the month on account of the annual closing of banks and Ram Navami holidays respectively.
Crude oil prices fell 3 per cent on Friday, coming off their biggest one-day gains in the previous session, as doubts emerged about a deal between top producers Saudi Arabia and Russia to cut output. Brent crude futures - the global benchmark for crude oil - were last seen trading down 9 cents at $29.05 a barrel, after having soared 21 per cent on Thursday.
Analysts say the rupee is likely to stay weak along with other emerging market currencies until the coronavirus pandemic subsides.
"Lower crude prices have eased pressure on the rupee to some extent... A further rise in oil prices will have a negative impact on the rupee," Abhishek Goenka, founder and CEO of forex advisory firm IFA Global, told NDTV.
"Another 30-40 per cent surge in the crude price alongside weak appetite for riskier assets and a stronger dollar will increase the probability of break above 76.40 level."
According to a poll of market strategists and analysts by news agency Reuters, the rupee would strengthen 3.1 per cent to 74.00 against the dollar in a year.
It is forecast to trade at 75.55 per dollar by the end of April. Its path will largely depend on how successful the government's steps are in containing the spread of COVID-19.
Analysts say Reserve Bank of India interventions have prevented the rupee from falling further. The RBI cut interest rates on March 27 by 75 basis points - its biggest cut since 2009 - to 4.40 per cent, following 135 basis points of cuts in 2019. The RBI also announced targeted long-term refinancing operations to ensure market liquidity.
While there are more than one million declared cases of coronavirus worldwide, in India, the tally of confirmed cases has crossed the 2,000 mark.