Rupee slips 17 paise, closes at record low on virus spread

#GS3 #Economy

Currency may fall further if govt. offers economic stimulus

  • The rupee slipped 17 paise against the dollar amid heightened uncertainty over the economy as the COVID-19 pandemic continued to spread at a brisk pace. 
  • The rupee opened at 76.07 compared to the previous close of 76.27, touching the day’s low of 76.48 a dollar before closing at 76.44, an all-time low.
  • The rupee, which has weakened about 7% against the dollar this year, hit a record intraday low of 76.55.
  •  The dollar index, which gauges the greenback's strength against the basket of six currencies was trading 0.3% higher at 99.19.
  • The rupee may depreciate further as the Centre is likely to announce an economic package to fight the loss caused by the pandemic.
  • RBI has not intervened strongly in the market to stem rupee depreciation in the last few sessions. Dealers expect the central bank to intervene once the rupee breaches the 77 to a dollar. 
  • In its macroeconomic review last week, RBI had said if the rupee depreciates 5% from the baseline, inflation could rise by 20 basis points (bps) while GDP growth could be higher by about 15 bps via increased net exports.
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