Registering losses for the fourth straight session, the rupee edged lower by 11 paise against the US dollar on Thursday, April 8, to settle at 74.58 (provisional) amid concerns of the second wave of COVID-19 in the country affecting the economic recovery. At the interbank foreign exchange market, the domestic unit opened at 74.38 against the dollar and traded in the range of 74.19 to 74.93 throughout the session. In an early trade session today, the local unit gained 10 paise to 74.37 against the dollar. It ended at 74.58 against the greenback, registering a fall of 11 paise over its previous closing of 74.47.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six peers, slipped 0.06 per cent to 92.39. On Wednesday, April 7, the domestic unit plunged as low as 105 paise, marking its biggest single-session drop in over 20 months. the rupee has now registered depreciation of 146 paise in four consecutive sessions of losses.
”There were five reasons for yesterday’s upmove on USDINR 1) A corporate bought in CF for outward remittance of dividend, 2) 1.00 lac crore of bond-buying announced by RBI a form of QE 3) stop loss triggered after 73.92 was breached 4) panic buying by importers 5) huge carry unwind as the perception of full lock down was prevalent thus downgrading the GDP which is expected to grow at 24% in first quarter as per conservative estimate,” said Anil Kumar Bhansali, Head- Treasury, Finrex Treasury Advisors.
On the domestic equity market front, the BSE Sensex ended 84.45 points or 0.17 per cent higher at 49,746.21, while the broader NSE Nifty climbed 54.75 points or 0.37 per cent to 14,873.80. ”Due to outage in Reuters rates the Forex rates have turned volatile and USDINR is being quoted at a high of 74.96 and current level is 74.75 with banks having heard quoting at a spread of 25 to 30 ps to their customers,” added Anil Kumar Bhansali.
According to exchange data, the foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 227.42 crore on April 7. Brent crude futures, the global oil benchmark, was trading 0.51 per cent down at $ 62.84 per barrel.