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The rupee continued its downward spiral and plunged 84 paise to a new record low of 75.10 (provisional) against the dollar on Thursday, as investors braced for a coronavirus-led economic recession.
Traders said there is a sense of anxiety among investors as they see the global as well as domestic economy plunging into a deep crisis due to the coronavirus pandemic that has killed over 9,000 and sickened lakhs of people around the globe.
The steep decline in domestic equities and sustained foreign fund outflows further dampened the sentiment, they said.
At the inter-bank foreign exchange market, the local currency opened at 74.96. During the day, it saw a high of 74.70 and a low of 75.30 against the American currency.
The domestic unit finally settled at 75.10 against the greenback, down 84 paise over its previous close. The local unit had settled at 74.26 against the greenback on Wednesday.
“India’s rupee weakened to a new record low on foreign fund outflows from domestic equity and debt market. Global meltdown in risk assets seen with rising number of coronavirus cases is adding to anxiety,” said V K Sharma, Head PCG and Capital Markets Strategy, HDFC Securities.
Sharma further said that foreign investors have pulled a combined USD 10 billion from Indian shares and debt so far this month, the biggest withdrawal since the US taper tantrum of 2013.
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