On Thursday, the Indian rupee hit a record low of 75 against the Us dollar tracking a slump in equities and currencies globally. Investors were concerned that support measures from the government and central banks may be insufficient to halt the economic damage caused by the coronavirus pandemic. The rupee hit a record low of 75 a dollar after opening at 74.96. It had closed at 74.23 on Wednesday.
Selling pressure from foreign investors also weakened sentiment. Foreign investors have sold nearly $10 billion in equity and debt markets so far this year. Traders were also worried India could become the next global hotspot for coronavirus infections that may further damage the economy which is already in trouble due to many reasons including banking bad debts and slowdown in various sectors. ‘The spread of COVID-19, outside of China and in India, has substantially raised market concerns on demand destruction and a significant near-term impact on economic growth. The government of India, along with local authorities, is undertaking steps to control the spread. However, these lockdown measures, along with the global slowdown, are likely to have a further negative impact on economic growth,’ said Nomura Research in a note to its investors.
The US Federal Reserve, along with several other major central banks, such as the European Central Bank (ECB) and the Bank of England (BoE), has cut interest rates to an all-time low, complementing it further with quantitative easing. The US has declared national emergency and Italy,  the world’s 8th largest economy has expanded its quarantine to the entire country.
Read EquityPandit’s Nifty Outlook for the Week