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Rupee ended sharply lower, Pound lower vs. Dollar

Monday,   23-Mar-2020   05:27 PM (IST)

The Indian rupee fell sharply and ended the session lower at 76.22/25 levels compared to its opening at 75.68/69 levels after touching the low of 76.25/26 levels in thin-volume trade, after many parts of world’s second most populous nation were put under a lockdown due to the rising number of reported coronavirus cases. Rupee traded in the range of 75.68-76.25 levels today. A rush for dollars in the forex market rose after most districts and states of India were under lockdown over the weekend due to the rapidly spreading coronavirus. Other Asian equities and currencies also tumbled in the wake of the global lockdown. The Hang Seng and the Kospi index declined 4.9% and 5.3% each. Among Asian currencies, the Korean won declined over 1.6%, while the Indonesian rupiah was down over 4%.Equity market crumbled on Monday as stocks across-the-board fell like ninepins after India went into the lockdown to contain the spread of Coronavirus (Covid-19) pandemic. The S&P BSE Sensex nosedived 3,935 points or over 13 per cent to settle at 25,981 levels with all the 30 constituents ending in the red. On the NSE, the benchmark Nifty tanked a whopping 1,135 points or 13 per cent to end the session at 7,610. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 8.65%, 5.83% and 4.99% respectively.

The British pound weakened on Monday, heading back towards the 35-year lows hit last week as investors rushed to buy the U.S. dollar amid another round of panic about the economic hit from the coronavirus crisis. Sterling has been under pressure because of a massive wave of selling of most currencies other than the dollar, which is the world’s most liquid currency and the safe haven of choice when confidence evaporates from financial markets. But the pound has also been hit by investor concerns that Britain’s approach in dealing with the virus, which has seen a more staggered disruption to economic and everyday life than in other countries, is not the right one. Britain’s large current account deficit has also made sterling vulnerable, while drastically poorer liquidity last week exacerbated the move downwards. Some analysts have been impressed by the British policy response to the crisis, however. The Bank of England has slashed interest rates to record lows, ramped up its quantitative easing programme and the government announced significant fiscal stimulus. Sterling was last down 0.6% at $1.16 after earlier hitting as weak as $1.1536. The pound last week hit $1.1413, its lowest since 1985. Against the euro the pound dropped 0.4% to 92.13 pence , still some way off last week’s lows of 95 pence.