The Indian rupee fell sharply the US dollar today after two fresh cases of coronavirus detected in India. Domestic equity markets also extended losses to the seventh day today. Rupee, which started the day on a positive note, witnessed heavy volatility and finally settled at 72.73 against the US dollar, which is its lowest value against the US dollar in over a year. The rupee had closed at 72.17 in the previous session.
The Health Ministry today reported two more positive cases of the novel coronavirus in India, one in Delhi and another in Telangana.
The patients had a travel history from Italy and Dubai in the United Arab Emirates, respectively, the government said. Both patients were stable and being closely monitored.
“The government is monitoring the situation at the highest-level,” said Health Minister Harsh Vardhan..
The rupee today opened at 72.07 and traded between 72.04 and 72.73 during the day.
The rupee has fallen sharply over the two sessions, falling over 100 paise against the US dollar.
Analysts expect the rupee to remain under pressure amid weaker economic data and foreign fund flows.
The government has advised citizens to refrain from non-essential travel to the worst affected countries, including China, South Korea, Iran and Italy.
The epidemic, which originated in the Chinese province of Hubei, has killed 3,000 people worldwide as authorities race to contain infections in Japan, Iran, Italy, South Korea and the United States.
Traders, cited by news agency Reuters, said the rupee could weaken further with 73 per dollar level likely to be tested during the week. But they expect the Reserve Bank of India to step in and sell dollars to prevent significant losses in the local unit.
The news of the fresh coronavirus cases pushed domestic shares lower, with the Sensex falling over 150 points. Earlier in the day, the Sensex had rallied nearly 800 points on hopes that major central banks would take steps to stabilise financial markets amid the virus epidemic.
“With new cases of coronavirus getting confirmed in India – one in Delhi and one in Telengana, market sentiments got severely dampened. Markets would continue to remain highly volatile and weak till the fast spread of coronavirus gets controlled,” said Siddhartha Khemka, head of retail research at Motilal Oswal Financial Services.