Rupee plunges 50 paise to 74.25/USD

Mumbai: The Indian rupee continued its downward spiral and plunged 50 paise to 74.25 (provisional) against the US dollar on Monday as concern over the economic fallout from the coronavirus pandemic outweighed the US Fed's emergency interest rate cut and the RBI's liquidity enhancing measures.

"Indian rupee in line with other Asian peers as concern over the global economic fallout from the coronavirus pandemic outweighed the Federal Reserve's emergency interest rate cut," said VK Sharma, head PCG and capital markets strategy, HDFC Securities. Forex traders said the fall in the domestic unit was in line with other Asian peers amid mounting fears of a coronavirus-led economic slowdown.

At the interbank foreign exchange market, the local currency opened at 74.10. During the day, it saw a high of 74.09 and a low of 74.35 against the American currency. The domestic unit finally settled at 74.25 against the greenback, down 50 paise over its previous close.

The local unit had settled at 73.75 against the greenback on Friday. The US Fed on Sunday made its second emergency rate cut in less than two weeks, slashing the benchmark borrowing rate to a range of 0-0.25 per cent, where it was during the 2008 global financial crisis.

Meanwhile, the Reserve Bank on Monday hinted at a rate cut at the next Monetary Policy Committee (MPC) meet on April 3 and announced more liquidity enhancing measures.

The RBI announced another round of USD 2 billion dollar-rupee swap on March 23 and up to Rs 1 lakh crore of long-term repo operations as and when required.