Rupee Edges Lower To End At 75.56 Against Dollar
The rupee weakened by as much as 14 paise - or 0.19 per cent - to 75.60 against the US dollar in a volatile session on Thursday, amid weakness in domestic equity markets and strength in the dollar overseas. The rupee moved in a range of 75.37-75.60 in the first half of the four-hour session, having started the day at 75.58 against the greenback. Concerns about the twin deficits - the trade deficit and the current account deficit - on account of the government's "Atma Nirbhar Bharat" economic package to fight the coronavirus pandemic put pressure on the rupee, say analysts.
The rupee closed at 75.56 against the US currency, down 10 paise compared to its previous close. At the current level, the rupee is down 5.89 per cent against the US dollar so far this year.
Finance Minister Nirmala Sitharaman said after market hours on Wednesday that loan guarantees worth Rs 4.5 lakh crore will be provided to small businesses, non-banking financial companies and power firms.
In addition, the government will set up two debt and equity funds amounting to Rs 70,000 crore to support stressed businesses.
The measures were part of a Rs 20 lakh-crore fiscal and monetary package announced by Prime Minister Narendra Modi on Tuesday to support the economy, which has been battered by a weeks-long lockdown to curb the coronavirus.
Ms Sitharaman also announced provident fund and tax benefits for people as well as extended the due dates for filing income tax returns.
Domestic equity markets pared losses after benchmark S&P BSE Sensex and NSE Nifty 50 dropped more than 2 per cent, dragged by financial and IT sector shares.
Crude oil prices picked up on Thursday by an unexpected drop in US crude stocks, but gains were capped by both a bleak outlook for the world's no. 1 economy as the coronavirus pandemic crushes fuel demand and concern over a potential second wave of cases.
Brent crude futures - the global benchmark for crude oil - were last seen trading up 0.2 per cent at $29.25 per barrel.
Most Asian currencies depreciated against the dollar on Thursday.
"US dollar index rose against the basket of currencies in Thursday morning after a sober speech from the US Fed chief who warned that the economy would take many months to recover from the coronavirus pandemic," Reliance Securities said in a research note.
The dollar index - which gauges the greenback against six peers - rose 0.09 per cent at the strongest level of the day.
On Wednesday, Federal Reserve Chairman Jerome Powell on Wednesday warned of an "extended period" of weak economic growth and called for additional fiscal spending to stave off the fallout from the coronavirus.
