Business

Rupee Drops To 75.20 Amid Rise In Dollar Demand

Rupee Drops To 75.20 Amid Rise In Dollar Demand

Rupee Vs Dollar: The rupee weakened to as low as 75.32 against the dollar during the session

Rupee Vs Dollar Rate Today: The rupee weakened to as low as 75.32 against the US dollar on Friday, before shutting shop with a loss of 21 paise - or 0.28 per cent - at 75.20. After starting the day weaker at 75.14 compared to its previous close of 74.99, the rupee moved in a range of 18 paise between 75.14 and 75.32 during the four-hour session and settled at 75.20 for the day. Analysts say increased demand for dollars among banks and importers and strength in the US currency overseas put pressure on the rupee. Besides, losses in domestic equity markets also hurt sentiment in the forex markets.

At the current level, the rupee has recovered 2.22 per cent from an all-time low of logged in April, but is still down 5.38 per cent so far this year - making it the worst performing Asian currency. 

Equity benchmarks Sensex and Nifty fell as a relentless surge in domestic COVID-19 cases dashed hopes of a quick recovery in an already-slowing economy battered by the pandemic. The Sensex index declined as much as 0.92 per cent - or 336.58 points - to 36,401.11 during the session, whereas the broader Nifty benchmark slid to as low as 10,713.00, having started the session weaker at 10,764.10 compared to its previous close of 10,813.45.

The dollar index, which gauges the dollar against six currencies, was last seen trading 0.06 per cent higher, having risen as much as 0.28 per cent earlier on Friday. Most Asian currencies moved lower against the greenback.

While the Japanese yen was up 0.35 per cent against the dollar at the time, the Singaporean dollar was down 0.14 per cent. The Taiwanese dollar was flat, but the Chinese yuan, the Thai baht and the South Korean won were down 0.22 per cent, 0.23 per cent and 0.73 per cent respectively.

"Any negative reaction of markets coming from COVID-19-related news could be short lived. On the other hand, India is considering raising nearly $2.7 billion by selling stake in the world's largest coal producer and IDBI Bank to fund its stimulus program. This will remain supportive for the rupee and could avoid any sharp depreciation in the (USD-INR)  pair," said Amit Pabari, managing director, CR Forex Advisors, a forex advisory firm.

(Also Read: Government Looks At Rs 20,000 Crore By Selling Stakes In Two Firms, Says Report)

"The pair is expected to trade within 74.50-75.50 levels for the next few sessions," he said.

Crude oil prices extended losses to a second straight session, and were headed for a weekly decline on worries that renewed lockdowns following a surge in coronavirus cases in the US and elsewhere could suppress fuel demand.

Brent crude futures - the global benchmark for crude oil - were last seen trading down 1.70 per cent at $41.62 per barrel, following a fall of more than 2 per cent on Thursday.

Global oil rates have regained some ground from March lows as the easing of restrictions on transport and industrial activity to curb the spread of the coronavirus pandemic boosted fuel demand around the globe. Brent crude futures had hit a 21-year low of $15.98 per barrel in April.

Meanwhile, foreign portfolio investors (FPIs) net purchased Indian equities worth Rs 212.77 crore on Thursday, whereas domestic institutional investors net sold shares worth Rs 803.39 crore, NSE data showed.