Rupee slips 31 paise to 75.89 against US dollar in early trade

The rupee depreciated 31 paise to 75.89 against the US dollar in opening trade on Monday tracking weak opening of domestic equities and sustained foreign fund outflows.

Forex traders said market participants are concerned about the effectiveness of the fiscal stimulus package and the impact of extended nationwide lockdown amid a significant rise in COVID-19 cases on the domestic economy.

The local unit opened at 75.85, then lost further ground and fell to 75.89 against the US dollar, down 31 paise over its previous close.

It had settled at 75.58 against the US dollar on Friday.

The government on Sunday extended the coronavirus lockdown for two more weeks with the fourth phase providing more relaxations outside the containment zones.

Though some restrictions were eased, "but the extension could further worsen the economic outlook for the current fiscal year, which could weigh on the currency further," Reliance Securities said in a research note.

Meanwhile, domestic bourses were trading on a negative note with the benchmark Sensex plunging 712.19 points at 30,385.54 and the broader Nifty down 204.85 points to 8,932.00.

Foreign institutional investors were net sellers in the capital market, as they sold equity shares worth Rs 2,388.04 crore on Friday, according to provisional exchange data.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.07 per cent lower at 100.32.

Brent crude futures, the global oil benchmark, rose 3.02 per cent to USD 33.48 per barrel.

Traders said rising coronavirus cases in the country weighed on the local unit.

In India, the death toll due to COVID-19 rose to 3,029 and the number of cases climbed to 96,169, according to the health ministry.

Meanwhile, the number of cases around the world linked to the disease has crossed over 47.13 lakh and the death toll has topped 3.15 lakh.