If the virus spreads further very rapidly then we can expect a deeper cut of 50bps by RBI, says Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services.
After hitting a record low of 74.50 in the early trade on March 13, the Indian rupee has recovered dramatically and trading near the day's high level at 73.95 per dollar.
The domestic currency touched a low of 74.50 per dollar in the initial trade on worries over the coronavirus pandemic.
However, it opened lower by 17 paise at 74.40 per dollar against previous close 74.23.
On Thursday, the rupee slipped 56 paise to a fresh 17-month low of 74.23 against the US dollar due to strong dollar demand as investors pruned riskier bets amid coronavirus pandemic fanning recession fears.
"The panic in equities has not snowballed into currencies to the same extent. The central bank has done a good job of containing volatility so far. After making a lifetime high of 74.49 levels, USDINR pair retraced back to 74 mark on visible regulatory interventions. A weekly close on either side of the range 73.75-74.50 will guide further direction,"said Abhishek Goenka, Founder & CEO, IFA Global.
India's retail inflation rate in February stood at 6.58 percent against 7.59 percent in January.
February core inflation came in at 4.1 percent against 4.8 percent in January.
Also Read - RBI likely to go for inter-meeting cut of 25-40 bps: Barclays
Oil prices fell on Friday for a third day, with Brent crude set for its biggest weekly drop since 1991 and U.S. crude heading for the worst week since 2008 as panic about plunging demand from the coronavirus outbreak grips the market.
The dollar stood tall on Friday as investors scrambled for the world’s most liquid currency amid deepening panic about the coronavirus while the euro nursed losses after the European Central Bank disappointed investors by not cutting rates.
Gold prices fell further on Friday and were on track to post their biggest weekly drop in nearly seven years, as a rout in global equities forced investors to cover margin calls.
"Due to the coronavirus uncertainty, we expect RBI to take pre-emptive measure anytime soon or at April’s MPC policy and cut repo rate. If the virus spreads further very rapidly then we can expect a deeper cut of 50bps by RBI," said Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services.Time to show-off your poker skills and win Rs.25 lakhs with no investment. Register Now!
