The Indian rupee fell for the sixth straight session to mark its lowest level in nearly nine months at 75.05 against the American currency on Monday as investors fretted over the prospects of lockdown in some parts of the country amid continuous rise in COVID-19 cases.
At the interbank foreign exchange, the rupee settled 32 paise lower against the greenback as weak domestic equities, rising crude oil prices and foreign fund outflows also weighed on sentiment.
The local unit opened at 74.97 against the greenback and traded in the range of 74.78 to 75.14 during the day. The 75.05 closing is the weakest since July 16 last year, when the rupee had closed at 75.18 to the US dollar.
“Rupee traded lower below 75 yet again as Maharashtra lockdown after Gudi Padwa festival sent weak signals across the risky assets, making rupee go weaker. Levels at which the rupee will trade looks 74.75-75.50 with a weak tone for rupee,” said Jateen Trivedi, Senior Research Analyst at LKP Securities.
The domestic currency has been battered by 2 per cent since the RBI unexpectedly announced quantitative easing style G-sec acquisition programme (G-SAP) last week with the first auction aggregating Rs 25,000 crore to be held on April 15, 2021.
This was the sixth straight session of loss for the domestic unit, during which it has seen depreciation of 193 paise.
“Indian rupee spot slipped past the 75-mark to nine-month low of 75.15 on Monday as rising COVID-19 cases sparked fears of a complete lockdown in Maharashtra and a few other states, dampening hopes of a faster recovery and increasing prospects of RBI’s ultra-loose monetary policy for a longer period,” said Kaynat Chainwala – Fundamental Research Analyst Currencies, Anand Rathi Shares and Stock Brokers.
This week, the rupee is likely to weaken further as investors cautiously await India’s industrial output, manufacturing output, trade balance and inflation figures coupled with the first G-SAP auction.
Meanwhile, India hit a new coronavirus infection record with 1,68,912 new cases, the highest single-day rise so far, taking the total tally of cases to 1,35,27,717, according to official data.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.05 per cent to 92.12.
Brent crude futures, the global oil benchmark, was trading 0.56 per cent up at USD 63.30 per barrel.
On the domestic equity market front, the BSE Sensex ended 1,707.94 points or 3.44 per cent lower at 47,883.38, while the broader NSE Nifty declined by 524.05 points or 3.53 per cent to 14,310.80.
Foreign institutional investors (FIIs) remained net sellers in the capital markets, pulling out Rs 1,746.43 crore on Monday, as per provisional data.