Rupee Sheds Gains, Falls Under 73-Mark Against US Dollar in Afternoon Trade

The rupee on Tuesday afternoon lost ground on the gains it made in the early trade and fell below the psychological mark of 73 against the US dollar. At 1:20 pm, the domestic currency was trading at 73.08 against the greenback, down 34 paise, as compared to the previous closing mark of 72.74. Earlier during the day, at the interbank foreign exchange, the rupee opened at 72.50 in morning trade and then gained further ground. However, as the day progressed, the currency could not hold on to the gains.

On Monday, amid a major selloff in the equity markets, the currency had fallen to its lowest level in more than 15 months.

Analysts say investor sentiment may remain fragile amid concerns over the impact of the coronavirus pandemic.

The rupee has shed 1.6 per cent of its value in the past three trading sessions. Coronavirus is now spreading much more rapidly outside China than within the country, leading the world into uncharted territory.

Globally, however, the risk sentiment improved after Japan's central bank chief said policymakers would take steps to stabilise market conditions, the advisory firm CR Forex Advisors noted.

At the end of Monday's trading session, news agency Reuters had quoted traders as suggesting that the rupee could weaken further with 73 per dollar level likely to be tested during the week. The analysts however, expect the Reserve Bank of India (RBI) to step in and sell dollars to prevent significant losses in the local unit.

Meanwhile, the benchmark equity indices were trading around half a percent in the green in the afternoon session.