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Last Updated : Mar 24, 2020 12:10 PM IST | Source: Moneycontrol.com

Rupee erases gains, but trades higher at 76.17 per dollar

We may see some intermittent rebound due to the RBI intervention, but even a rate cut from the central bank may not be able to stem the decline in currency as the larger trend is skewed on the downside, says Sugandha Sachdeva VP-Metals, Energy & Currency Research, Religare Broking.

Representative Image
Representative Image

Indian rupee erased early gains but trading higher by 12 paise at 76.17 per dollar amid positive trading seen in the domestic equity market.

It has opened higher by 22 paise at 76.07 per dollar on Tuesday against previous close of 76.29 per dollar.

The Sensex was up 464.50 points or 1.79% at 26445.74, and the Nifty was up 132.25 points or 1.74% at 7742.50.

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On Monday the domestic currency slipped by 110 paise at 76.29, near lifetime low of 76.32 against the US dollar as domestic equities came under pressure following a sharp surge in coronavirus cases in India.

Also Read - Rupee depreciation may continue in the short term, may touch 77/USD

“The ripple effect of the coronavirus crisis is creating lot of turbulence in the financial markets space. It has led to lot of concerns about impending economic turmoil , steering significant outflows from the domestic equities and, causing the domestic currency to depreciate," said Sugandha Sachdeva VP-Metals, Energy & Currency Research, Religare Broking.

"The risk aversion is the primary reason because of which the domestic currency has been on a downwards spiral. In this backdrop, further decline is in sight for the Indian rupee, where it seems inclined to traverse lower towards levels of close to 77-77.50 in coming days.”

“We may see some intermittent rebound due to the RBI intervention, but even a rate cut from the central bank may not be able to stem the decline in currency as the larger trend is skewed on the downside,” she added.

Gold prices rose on Tuesday, following a near 4% jump in the previous session after the U.S. Federal Reserve announced unprecedented measures to support an economy which is reeling from the coronavirus pandemic

U.S. crude oil futures climbed nearly 3% on Tuesday in light trading as the Trump administration launched an effort to work with Saudi Arabia to stabilise oil prices

Also Read - Rupee breaches 76 level per dollar; likely to touch 79-mark in coming days, say experts

The rupee is now the Rs 76/$ stage and the next testing point will be 77, which is expected soon. The reason for this is more on the global side with the dollar strengthening and other currencies weakening, said CARE Ratings.

Sale of dollars directly by the RBI can help but only temporarily for a day or two before it will be back to a volatile market. We can expect the rupee to move towards the $ 77/$ mark in the next few sessions, it added.

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First Published on Mar 24, 2020 09:00 am

tags #Rupee

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