Imminent Lockdowns Posing Risk To Economic Recovery Drag Rupee To Below 75/$

The domestic currency in Monday's (April 12, 2021) trade is dragged past 75 levels for the first time in 9 month as there was continuing selling in FPIs from the Indian equity and bond markets alike.

At 1:38 pm, the currency against the greenback traded at 74.89, while it hit a low of 75.15 per US dollar.

As the economic recovery due to imminent lockdown in Maharashtra and other states may suffer, there is dealt a blow on the Indian rupee. Since, the start of March FIIs had been selling in bond and have sold $856 billion worth of bonds during the period.

"(Last) week has been very volatile and the rupee has depreciated nearly 2.5% on an unprecedented bond buying plan by the RBI. Had the movement been dollar index driven, we wouldn't have seen such a sharp depreciation in the rupee. Again, next week is a truncated week with two currency holidays, so we can expect the optimism over dovish Fed to limit the fall in rupee with focus on India's CPI data and impact of covid's second wave. In USDINR spot RBI is seen intervening in the spot around 74.95 zone, so we can expect the spot to trade within 74.25-75.25.", said Rahul Gupta, head of research-currency, Emkay Global Financial Services.

And now with a past 24-hour tally at a record 1.6 lakh India has surpassed Brazil to be the second most infected country globally.