Rupee Hits Over 1-Year Low; Weakens Below 73.5 Per Dollar

Erasing morning gains, the Indian rupee fell to below 73.5 a dollar on Wednesday, its lowest since November 2018. The domestic currency has remained under pressure since the last week as foreign investors withdrew money from emerging markets amid fears of a global recession due to the fast-spreading coronavirus outbreak.

On Tuesday, the rupee touched the 73/dollar level for the first time since October 2018 and closed at 73.20 against the greenback. A depreciation of 107 paise was observed in the previous two sessions as the currency generally imitates the movement of stock markets.

Amid the virus scare, foreign investors have withdrawn a net of around Rs 23,000 crore from Indian markets in the current calendar year. Benchmark indices Sensex and Nifty 50 have been closing lower for eight consecutive sessions.

The rupee's weakness puts pressure on India's import bill despite the recent advantage of decline in oil prices in the international markets.

Experts say that the extent of depreciation cannot be currently determined and would be driven by the incoming information on the extent of spread of the virus outbreak, its duration and impact on the Indian, as well as, world economy.