ReutersRelated
Mumbai: The Indian rupee opened 5 paise lower against the US dollar on Friday as the greenback strengthened in light of a surge in coronavirus cases and fading hopes of further US stimulus.
The rupee opened at 73.43 against the previous close of 73.38.
As fresh curbs to combat Covid-19 were introduced in Europe and Britain, the world's reserve currency surged to a two-week high of 93.910 against a basket of currencies, Reuters reported.
On Thursday, the rupee came under pressure in the latter half of the session following a plunge in domestic equities and strength in the dollar against its major crosses, and selling across the board was witnessed.
Motilal Oswal analysts pointed out that the rupee was also weighed down after rating agency Moody’s said it expects India’s debt burden to touch 90 per cent of GDP in 2020, up from 72 per cent of GDP in 2019 which is significantly higher than the median of similar rated countries of around 59 per cent.
Moody’s expects India’s GDP to drop 11.5 per cent in 2020-21, so the 0.5 per cent of GDP gain expected by the government from these stimulus measures will provide only ‘a small boost’, it said.
“We expect USDINR (Spot) to quote with a positive bias and in the range of 73.20 and 73.80,” Motilal Oswal analysts said in a note.
Meanwhile, the British pound was weighed down against the US dollar after EU leaders agreed today to keep on talking to Britain to get a new trade agreement “in the coming weeks” but also decided to step up their contingency preparations should the troubled negotiations fail.
In the next couple of sessions Brexit related uncertainty is likely to trigger volatility in major crosses, Motilal Oswal analysts said.
The rupee opened at 73.43 against the previous close of 73.38.
As fresh curbs to combat Covid-19 were introduced in Europe and Britain, the world's reserve currency surged to a two-week high of 93.910 against a basket of currencies, Reuters reported.
On Thursday, the rupee came under pressure in the latter half of the session following a plunge in domestic equities and strength in the dollar against its major crosses, and selling across the board was witnessed.
Motilal Oswal analysts pointed out that the rupee was also weighed down after rating agency Moody’s said it expects India’s debt burden to touch 90 per cent of GDP in 2020, up from 72 per cent of GDP in 2019 which is significantly higher than the median of similar rated countries of around 59 per cent.
Moody’s expects India’s GDP to drop 11.5 per cent in 2020-21, so the 0.5 per cent of GDP gain expected by the government from these stimulus measures will provide only ‘a small boost’, it said.
“We expect USDINR (Spot) to quote with a positive bias and in the range of 73.20 and 73.80,” Motilal Oswal analysts said in a note.
Meanwhile, the British pound was weighed down against the US dollar after EU leaders agreed today to keep on talking to Britain to get a new trade agreement “in the coming weeks” but also decided to step up their contingency preparations should the troubled negotiations fail.
In the next couple of sessions Brexit related uncertainty is likely to trigger volatility in major crosses, Motilal Oswal analysts said.
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