Mumbai, Mar 11 (PTI) The rupee recovered 49 paise to settle at 73.68 against the US dollar on Wednesday amid positive domestic equities and weakening of the American dollar in the overseas market.
The rupee on March 9 had plunged to a 17-month low of 74.17 against the US dollar amid mounting fears of a coronavirus-led economic slowdown.
At the interbank foreign exchange market, the rupee opened higher at 73.88 gained further ground to touch a high of 73.55 in day trade. The local unit finally settled at 73.68 against the US dollar, registering a rise of 49 paise over its previous close.
The forex market was closed on Tuesday on account of Holi.
“Rupee traded strongly after flat positive opening on the selling of USDINR pair by exporters following likely intervention by the Reserve Bank of India (RBI) to curb sharp volatility in the currency pair USDINR,” Jateen Trivedi, Senior Research Analyst (Commodity & Currency) at LKP Securities.
Trivedi further said that “more or less the market will keep trading volatile as coronavirus updates keep the buyers interested in USIDNR pair but falling crude prices give the strength to rupee”.
Going ahead the rupee can trade in a range of 73.45-73.85, he noted.
Forex traders said rupee traded higher on back of emergency rate cut by the Bank of England while hopes of US stimulus led to a recovery in global equities.
“Market is eyeing on RBI for a rate cut as inflation data could pave way for the same. There are possibilities that RBI has intervened which supported the rupee,” said V K Sharma, Head PCG & Capital Markets Strategy, HDFC Securities.
Sharma further said that concerns still remain on account of sustained foreign fund outflows as so far this month, foreign funds dumped USD 1.25 billion equities and USD 246 million debt amid rising concerns of novel coronavirus cases.
Foreign institutional investors (FIIs) remained net sellers in the capital markets, as they sold shares worth Rs 3,515.38 crore on Wednesday, provisional exchange data showed.
Meanwhile, investor sentiment remained fragile amid concerns over the impact of coronavirus outbreak on the global economy, forex traders said.
The global death toll from the new coronavirus crossed 4,000 as the outbreak has spread to over 100 countries with more than 1,10,000 cases of infection.
On the domestic equity market front, the 30-share index pared most gains to settle 62.45 points or 0.18 percent higher at 35,697.40. On similar lines, the broader NSE Nifty closed 6.95 points or 0.07 percent up at 10,458.40.
Meanwhile, Brent futures fell 3.71 percent to USD 35.84 per barrel.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, slipped 0.29 percent to 96.13.
The 10-year Indian government bond yield was at 6.13 percent.
The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 73.9538 and for rupee/euro at 84.3330. The reference rate for rupee/British pound was fixed at 96.6690 and for rupee/100 Japanese yen at 72.06.