Despite the rally in the markets, the rupee on Tuesday slumped 47 paise to 73.23 against the US dollar amid concerns over the possibility of capital outflows and a fall in the GDP growth in the wake of coronavirus outbreak.
After starting on a positive note, the rupee witnessed heavy volatility during the session and finally settled below 73 per US dollar level as uncertainty over coronavirus spooked investors. The rupee had fallen to 72.76 against the dollar on Monday. This is the third consecutive session of fall for the domestic unit during which it has depreciated by 160 paise.
“The entire premise of the rupee being likely to outperform other Asian and emerging market currencies goes for a toss if new coronavirus cases are detected in India. If the disease spreads, it would compound the challenges for the government and the central bank which are already grappling with the weakest economic growth in 7 years,” said an analyst with IFA Global.
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