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Indian rupee weakened today against the US dollar, tracking a selloff in domestic equity markets. A broadly stronger US dollar also weighed on the rupee. After opening at 74.85, the fell to 75.56 at day's low against the USD. In comparison, the rupee had closed at 74.85 in the previous session. In today's session, rupee traded in the range of 75.10 to 75.56. The total coronavirus cases in the country has crossed 1,070, according to the latest data released by the government.
"The overall risk sentiment is negative. USD has strengthened across the board. Month-end exporter selling and nationalized banks intervening on behalf of the RBI could cap up side in USDINR intra-day," said Abhishek Goenka, Founder & CEO, IFA Global.
Indian stock markets came under strong selling pressure today with Sensex down about 1,500 points in afternoon trade. Weighing on the rupee is record withdrawal from foreign institutional investors this month.
The total net outflow stood at ₹1,12,188 crore in March, which comes after six consecutive months of investment by FPIs since September 2019.
The depositories data showed that a net amount of ₹59,377 crore was pulled out from equities and ₹52,811 crore was withdrawn from the debt segment by foreign portfolio investors (FPIs) between March 2-27.
The Indian rupee has weakeend about 6% against the US dollar so far this year, hitting a record low of 76.32 earlier this month.
On Friday, the Reserve Bank of India reduced interest rates the most in a decade and maintained accommodative policy stance.
The dollar today rebounded against a basket of other major six currencies , rising to 98.81 after a sharp fall in the previous week.