Rupee Closes Flat After Swinging Heavily Amid Coronavirus Uncertainty

The rupee witnessed another volatile day before closing flat at 73.19 against the US currency on Wednesday as increasing number of coronavirus cases in India kept investors on edge despite a rate cut by the US Federal Reserve. The currency had opened strong and raced to a high of 72.90 to the US dollar in early trade following weakness in the US currency after the rate cut by the US Fed.

However, as the government confirmed 16 new cases of coronavirus affected people in India, uncertainty gripped the currency markets with the rupee hitting an intra-day low of 73.63 in the afternoon trade.

The government said 28 positive cases of coronavirus have been detected so far in India.

"A heavy selling was witnessed in rupee after positive opening. The weakness crossed the 73.50 mark against the dollar as the USD/INR pair traded above 73.50 for first time since November 2018. The panic of corona plays into our domestic market as well as the global front which has forced the funds outflows," Jateen Trivedi, Senior Research Analyst (Commodity & Currency) at LKP Securities told news agency PTI.

On Tuesday too, the currency had opened on a positive note before losing ground rapidly to close at a 16-month low of 73.29. The rupee has in fact, depreciated more than 1.5 per cent in the last three sessions.

Meanwhile, on the stock market front, the BSE Sensex swung over 945 points during the day. The 30-share index settled 214.22 points or 0.55 per cent lower at 38,409.48. The broader NSE Nifty closed 52.30 points or 0.46 per cent down at 11,251.