Coronavirus may pull down Indian rupee to all-time low against US Dollar, say experts
Indian Rupee may further go down on the Coronavirus spread and in the near future, it may hit its all-time low of Rs 74.47/dollar.
The rupee extended losses against the US dollar falling to Rs 72.36 even as gold prices are going sky high. Coronavirus has a ripple effect on the Indian stock market as retail investors are fretting over the Chinese epidemic. The Indian stock market index fell sharply due to Coronavirus. The BSE flagship index indicated that Sensex, Nifty are falling and people are afraid to invest in the stock market due to high chances of loss. According to experts, after the detection of Coronavirus in more than 75 countries that include the US and India, COVID is further going to affect rupee to dollar exchange rates. They are of the opinion that rupee may hit its all-time low of Rs 74.47 per US dollar.
Speaking on the rupee to dollar exchange rates Anindya Banerjee, Research Analyst — Derivative and Currency at Kotak Securities said, "Rupee is crashing because of the Coronavirus impact on the global markets and detection of COVID in India has further done the damage to INR to USD exchange rates at the Forex market. Currently, the rupee has strong support at Rs 74 per US dollar but if the Coronavirus doesn't subside then it may go down below its all-time low of Rs 74.47 per US dollar."
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On what could be the possible steps that the Government of India may take to contain the free-fall of rupee against dollar Anindya said, "The Reserve Bank of India (RBI) may go the US Federal Reserve's way and cut interest rates. but, if they do that Indian Rupee will become non-attractive in the Forex Market as people would start selling rupee on every rise."
Anindya said that in the last 12 months, Indian Rupee has remained the most stable currency in the Forex market and hence forex traders used to take short positions against the US dollar. But, if the RBI decides to cut interest rates due to the Coronavirus, then Forex traders taking a short positions against the Indian Rupee won't allow it to recover against the Greenback."
Speaking on the Coronavirus impact and what should be the ideal way for the Forex markets and other market investors to remain insulated from the COVID impact, Kaushlendra Singh Sengar, Founder & CEO, Invest19.com said, “It would be recommendable for retail investors and traders to not fall for panic selling and be patient enough to hold on to their long-term investments as panic withdrawal would only incur losses.”
He said that due to high reliance on Chinese goods via imports, India getting impacted economically and the benchmark indices have fallen sharply during this unexpected turn of events.
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