Rupee plunges 73 paise to 74.96 against US dollar

The rupee on Thursday opened 73 paise down at 74.96 against the US dollar amid sustained foreign fund outflows and heavy selling in domestic equities.

The rupee on Wednesday settled 2 paise lower at 74.23 against the greenback.

Foreign portfolio investors (FPIs) have withdrawn nearly Rs 70,000 crore on a net basis from the Indian markets in March so far as the coronavirus pandemic triggered fears of a global recession.


Overseas investors pulled out a net sum of over Rs 36,200 crore from equities and Rs 32,000 crore from the debt segment this month so far, data available with Ace Equities showed.

“The trend of the markets shows that investors are fleeing emerging markets in record numbers and piling into the US dollar despite two emergency interest-rate cuts this month by the Federal Reserve. Data shows that outflows from emerging markets are already at record levels, reaching $30 billion in 45 days amid the virus outbreak,” Motilal Oswal Financial Services said.

On coronavirus front, there is lockdown across Europe and in the US is likely to result in a sharp slowdown in their respective economies. The Senate approved the House-passed coronavirus bill on Wednesday and President Trump signed into law a coronavirus relief package that includes provisions for free testing for Covid-19 and paid emergency leave.

Moreover, there is general consensus in the market that a vaccine for the virus is developed or the number of cases truly peak, the impact of any monetary or fiscal stimulus will be short-lived. For Europe, ECB announced plans to buy an additional €750bn in bonds after holding an emergency call of its rate-setting committee in response to the worsening economic and financial turmoil caused by the coronavirus pandemic.

On economic calendar front, markets await data from US and some announcements from BOJ.