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Rupee Value Declines by 27 Paise Against US Dollar

The rupee declined by 27 paise to reach 71.81 against the US dollar at the lowest level reported on Thursday, in the face of rising international oil prices and weak domestic stock trading. Since beginning the session towards the greenback at 71.75 the rupee fell in the first half of the day to as low as 71.81. Concerns about the effect of China’s coronavirus outbreak on the world economy and continued outflows of foreign funds kept the rupee under pressure, say, analysts.

The rupee traded against the greenback at 11:03 am at 71.63, down nine paises from its previous 71.54 close. By then during the session, the currency had risen within a range of 71.62-71.81. S&P BSE Sensex and NSE Nifty domestic stock benchmark indices turned flat in afternoon trading amid lacklustre trading a day after they jumped more than 1% following four straight days of losses.

Forex consultant IFA Global expects the rupee to rise in the near term with an upside bias in a range of 71.55-71.85. China registered a large drop in new infections of coronavirus but combined with a spike in infections in South Korea, two obvious deaths in Japan, and researchers found the virus to spread more quickly than previously thought.

China Shows Large Drop Due to COVID-19

On Wednesday, China had 394 new cases, the lowest ever since Jan. 23. More than 2,100 people have died as a result of the coronavirus in China. With eight deaths in other countries, and that’s not including the two from the Japanese quarantined ship. More than 2,100 people have died from China’s coronavirus. It pread to more than two dozen nations. So, governments around the world are preventing it from becoming a global pandemic.

As expected, China lowered its benchmark lending rate on Thursday. They contributing to a slew of steps in recent weeks to soften the economic impact of the virus. Crude oil prices added with benchmark overnight losses last seen Brent trading down 0.27 per cent at $59.28. Domestic forex markets held shut for Chhatrapati Shivaji Maharaj Jayanti on Wednesday, February 19. They will also be closed for Mahashivratri on Friday.

Meanwhile, foreign institutional investors (FIIs) remain net sellers on the capital markets. Pulling Rs 190.66 crore out on Wednesday, according to provisional NSE results.

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