The Indian rupee has breached the 74 per dollar mark and experts feel that with continued global economic concerns and possibilities of further plunge in financial and oil markets, it may continue to witness volatility in the coming days.
On Monday, the rupee touched a 17-month low of 74.17 a dollar.
The slump in rupee was on the back of the carnage across global financial and oil markets on persistent concerns of severe impairment of the global economy due to the coronavirus outbreak. Further, free fall in oil prices also weighed on the sentiments.
Although, the rupee has significantly weakened in the past ten days, over the past one month, it has been depreciating and has weakened from around 71 per dollar to over 74.
Slump in oil prices played a major role in the currency market. Energy markets went into a free fall on Monday with oil prices across variants plunging around 30 per cent, the biggest fall since the 1991 Gulf War.
The slide comes after Saudi Arabia shocked the market by launching a price war after no consensus was arrived between OPEC and Russia to cut crude oil production as part of market stabilisation exercise.
Late last week, talks between oil cartel Organisation of Petroleum Exporting Countries (OPEC) and Russia collapsed as the two sides failed to agree on an output cut deal. This pushed Saudi Arabia, the world''s largest oil producer, to cut its crude prices and announce increase production leading to a mayhem in an already over supplied oil market.
Brent crude prices fell to $31 per barrel on Monday. Currently, Brent crude futures have somewhat recovered and are currently around $36.81 per barrel. The West Texas Intermediate (WTI) crude is around 33.47 per barrel.
Along with the global stock markets, the Indian equity market also witnessed a bloodbath on Monday with the BSE ensex registering its biggest single day fall in its history as it closed 1,941 points lower.
Investors lost around Rs 7 lakh crore during the day due to the rout, analysts said
The Sensex closed at 35,634.95, lower by 1,941.67 points or 5.17 per cent from the previous close of 37,576.62.
The Nifty50 on the National Stock Exchange (NSE) closed at 10,451.45, lower by 538 points or 4.90 per cent from its previous close on Tuesday.
The Indian rupee on Thursday weakened to a 17-month low of 74.34 per US dollar as global markets slumped after the World Health Organization declared coronavirus as a global pandemic.
It has however, somewhat recovered from the lows to trade around 74.14 per greenback.
Stocks markets across the globe have plunged after WHO''s announcement on Wednesday. Indian equities also slumped with the BSE Sensex trading over 1,800 points lower.
At 10.20 a.m., on 12th March, Sensex was trading at 33,824.09, lower by 1,873.31 or 5.25 per cent from its previous close. The NSE Nifty50 was trading 564.45 points or 5.40 per cent lower at 9,893.95.
Along with the coronavirus fears, fall in oil prices also led to the depreciation in the Indian currency. Brent crude is currently trading around $34 per barrel. --IANS rrb/vd
( 398 Words)