Rupee breaches 75 to a dollar, hits record low

Bond yields harden despite OMO plan

The rupee tumbled past the 75-to-a-dollar mark on Thursday for the first-time ever as foreign investors continued to pull out of emerging market economies following the spread of COVID-19 that has put global economic growth at risk.

The rupee opened weak at 74.96 to a dollar compared with the previous close of 74.26 and went on to hit 75.31 a dollar. Currency dealers said state-run banks had been spotted intervening on behalf of the central bank, helping the currency stem losses.

The rupee closed the day at 75.10, down Rs. 0.84 or 1.13%. The rupee weakened despite the sharp fall in oil prices over the last few days and a narrowing current account deficit. “The rupee remains under tremendous pressure given the fallout of COVID-19,” said Hitesh Jain, lead analyst, Yes Securities.

“On the rupee outlook, we see the rupee in the range of 74-76 for the next 1-2 months,” he added.

The weakness in the currency market spilled over to the bond market with the yield on the 10-year government bond jumping 11 bps to 6.41%. Bond yields hardened despite the RBI saying it would buy bonds worth Rs. 10,000 crore on Friday.

Recommended for you