Rupee slides 22 paise to nearly 3-week low of 71.54 against US dollar

The rupee tumbled by 22 paise to settle at a nearly three-week low of 71.54 against the US dollar on Tuesday as concerns over the economic fallout from coronavirus outbreak continued to roil forex market sentiment.

Besides, sustained foreign fund outflows and subdued equities also put pressure on the rupee.

Starting off the session on a weaker note, the rupee weakened further to hit the day's low of 71.56 against the American currency. The domestic unit finally settled down by 22 paise at 71.54, a level not seen since January 30.

The dollar index, which gauges the greenback's strength against a basket of six currencies, rose by 0.15 per cent to 99.15.

The 10-year government bond yield was at 6.39 per cent.

Global crude oil benchmark Brent futures dropped 1.89 per cent to trade at USD 56.58 per barrel.

"Rupee started the day at weak note crossing beyond 71.50, majorly on back of selling from institution in risky assets as FIIs (are) likely to be pulling out money from equities as the global market keep a check on slowdown affects on rising Corona virus fears in China," LKP Securities Senior Research Analyst (Commodity & Currency) Jateen Trivedi said.

The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 71.4259 and for rupee/euro at 77.4162. The reference rate for rupee/British pound was fixed at 93.1737 and for rupee/100 Japanese yen at 65.02.

On the equities front, the Sensex was down 161.31 points or 0.39 per cent at 40,894.38, while the NSE barometer Nifty settled at 11,992.50, showing a fall of 53.30 points or 0.44 per cent.

According to the provisional exchange data, FPIs remained net sellers in the capital markets as they offloaded equities worth Rs 74 crore on a net basis on Tuesday.

Meanwhile, worries over rising death toll and the economic fallout from the novel coronavirus continued to haunt investors globally.

The coronavirus epidemic that emerged in central China has now killed nearly 1,800 people and has spread around the world.