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Last Updated : Mar 23, 2020 02:06 PM IST | Source:

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

The Indian currency touched an intraday low of 76.16 against the US dollar in today's trade so far amid strengthening of the US dollar against its global peers.

A relentless exodus of foreign funds from the Indian market dragged the Indian currency below 76 levels on March 23 even as global crude oil prices are trading at unusually low levels.

The Indian currency touched an intraday low of 76.16 against the US dollar in today's trade so far amid strengthening of the US dollar against its global peers.

On March 20, the rupee gave up its day's gains to settle 8 paise lower at a fresh lifetime low of 75.20 against the US dollar as the forex market continued to grapple with economic uncertainties due to fast-spreading coronavirus pandemic.


Rupee's fall in mirroring the sentiment in the equity market.

Broader indices Sensex and Nifty plummeted in the early trade today, hitting their 10 percent lower circuit.

Volatility is high and selloff has enveloped all sectors in the market.

Rupee may suffer more

Currencies of emerging markets are suffering as the dollar is getting stronger amid its heightened demand globally.

While there is complete uncertainty with respect to when normalcy would come back to the market and what will be the magnitude of the damage inflicted by COVID-19 to the global economy, the currencies of emerging markets are expected to reel under pressure.

"Pandemic is causing widespread lockdowns, causing the economy to grind to halt. In such a situation, emerging market currencies are vulnerable due to their dependence on dollar debt. A scramble for dollars would continue as long as the panic lasts," said Anindya Banerjee, DVP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities.

"RBI would continue to sell dollars aggressively but that may not stop the bleed in Rupee. Over the next couple of weeks, there is a growing risk of USD-INR inching towards 78 levels on spot. Technically, USD-INR needs to respect 74.50 levels, previous all-time high, to keep the bullish bias alive," he added.

Sameer Kalra, Founder, Target Investing is of the view that there is no specific level for the rupee as the dollar shortage is massive globally and is increasing at a rapid pace daily.

He expects the rupee to touch even the level of 79 in the coming days.

At this juncture, the Reserve Bank of India will have to ensure ample liquidity in the market.

"There is a scramble for the US dollar. RBI would have to continue to ensure ample liquidity. We expect liquidity to dry up in the forex market and quotes to become wider as participation tapers off. Operational and liquidity risk in such a situation would be at par with market risk," said Abhishek Goenka, Founder & CEO, IFA Global.

Sriram Iyer, Senior Research Analyst at Reliance Securities believes the Indian rupee is expected to weaken further against the dollar even though the USD-INR pair is trading at all-time high levels.

"Rupee has started to trade around 76 levels with an increase in volume activity which suggests that price has entered into a new zone range. Downside 74.40 level will act as support for further upside rally up to 78 levels," Iyer said.

Manoj Jain, Director at IndiaNivesh said the rupee has been on a downward trend since February 2020 and added that the USD-INR future gives a breakout above 75.80 and if it gives closing above this levels, it could show further weakness in coming days.

"We expect the rupee to remain weak in the coming days and USD-INR future could test 77.80-79.20 levels," said Jain.

Disclaimer: The views and investment tips expressed by investment experts on are their own and not that of the website or its management. advises users to check with certified experts before taking any investment decisions.

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First Published on Mar 23, 2020 01:25 pm
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