Rupee slides 10 paise to over 1-month low of 71.64 against US dollar

The rupee on Thursday declined by 10 paise to settle at a more than one-month low of 71.64 against the US dollar lower by 10 paise amid heavy selling in domestic equities and strengthening of the American currency in the overseas market.

Forex traders said investor sentiments remained fragile amid coronavirus fears and sustained foreign fund outflows.

The death toll from the coronavirus epidemic in China has climbed to 2,118, while the overall confirmed cases increased to 74,576, Chinese officials said on Thursday.

At the interbank foreign exchange market, the local currency opened at 71.75. During the day, it lost ground and touched a low of 71.80 and finally settled 10 paise lower at 71.64 against the US currency, a level not seen since January 8.

The rupee had settled at 71.54 against the US dollar on Tuesday. Forex market was shut on February 19, on account of Chhatrapati Shivaji Maharaj Jayanti.

"Indian rupee recovered early morning losses following Asian peers. Foreign fund inflows, dollar selling by state owned banks and stable crude oil prices also supported the rupee," said V K Sharma, Head PCG and Capital Markets Strategy, HDFC Securities.

Sharma further said that the near-term bias for rupee is bearish amid stronger dollar vis-a-vis major trading currencies.

On a weekly basis, the rupee lost 33 paise.

"Despite a lackluster week, we saw an appreciation in USD/INR spot tracking some uncertainty over coronavirus along with sharp surge in dollar index and crude oil prices," said Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.15 per cent to 99.85.

The 10-year Indian government bond yield was at 6.42 per cent.

Meanwhile, Brent crude fell 0.20 per cent to trade at USD 59.00 per barrel.

On the domestic equity market front, the 30-share BSE gauge settled 152.88 points, or 0.37 per cent, lower at 41,170.12. Similarly, the broader NSE Nifty slipped 45.05 points, or 0.37 per cent, to 12,080.85.

Foreign institutional investors sold equities worth Rs 190.66 crore on a net basis on Wednesday, according to provisional exchange data.

The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 71.4013 and for rupee/euro at 77.3628. The reference rate for rupee/British pound was fixed at 92.8193 and for rupee/100 Japanese yen at 65.04.