<p>The Indian rupee has depreciated to a 15-month low as foreign funds have continued their withdrawals from the emerging markets amid the spread of deadly coronavirus across the globe.</p>.<p>The domestic currency, on Tuesday, crashed to sub-73 level for the first time since October 2018, on the back of three days of continuous and heavy depreciation viz a viz US dollar. The rupee tanked 52 paise on Tuesday to close at 73.20 against the greenback, on top of 107 paise depreciation in the previous two trading sessions. During the day, the rupee had even depreciated by as much as 64 paise but made a partial recovery in the last hour of trade.</p>.<p>This is the lowest the Indian rupee has touched since November 1, 2018, when it had closed at 73.46 against the greenback. This also happens to the first time that the rupee has closed below the psychological 73-mark in the past 15 months.</p>.<p>In the three trading sessions, the rupee has now lost 2.2% or 159 paise against the US dollar, as foreign funds continue to sell-off from the Indian markets. </p>.<p>The depreciation is even more worrisome as the month of March is typically good for the Indian rupee as remittances, from both individuals and companies tend to buoy the exchange rate.</p>.<p>According to IFA Global, a broker and advisor on forex, in the last 10 years, on seven occasions the rupee has seen appreciation against US Dollar. However, this time, as foreign funds are dumping riskier assets in the emerging markets due to the spread of coronavirus, the rupee has been showing a huge slide.</p>.<p>"It could be due to foreign outflows and risk aversion for emerging market assets and currencies due to the uncertainty and concerns surrounding the spread of coronavirus. The strength of the US dollar has also been a factor," said Kavita Chacko, Senior Economist at CARE Ratings.</p>.<p>In the past three trading sessions, the FIIs have ended up being net sellers in the Indian markets with withdrawals of close to Rs 6,200 crore. In the current calendar year, the foreign investors have pulled out a net of about Rs 23,000 crore from Indian markets. </p>.<p>The analysts, as a result, are also revising near term targets for the rupee towards lower levels. The five economists that DH spoke to, predicted the rupee to be near the 74-mark against the US dollar. The lowest that rupee has touched ever has been 74.28 (intraday), on October 5, 2018.</p>.<p>"The extent to which the depreciation persists will be driven by incoming data on the spread of the outbreak. It is likely duration and impact on the Indian economy," said Aditi Nayar, Principal Economist at ICRA. </p>.<p>This is likely to put pressure on India's import bill, despite the massive correction in crude oil prices. </p>.<p>"The decline in crude oil prices could offset to an extent the depreciation in the currency," Chacko said. The prices of Brent futures in the International markets have fallen by a whopping 24% in the past two months. </p>.<p>It will also lead to a hike in many consumer durables that are being imported, including smartphones.</p>
<p>The Indian rupee has depreciated to a 15-month low as foreign funds have continued their withdrawals from the emerging markets amid the spread of deadly coronavirus across the globe.</p>.<p>The domestic currency, on Tuesday, crashed to sub-73 level for the first time since October 2018, on the back of three days of continuous and heavy depreciation viz a viz US dollar. The rupee tanked 52 paise on Tuesday to close at 73.20 against the greenback, on top of 107 paise depreciation in the previous two trading sessions. During the day, the rupee had even depreciated by as much as 64 paise but made a partial recovery in the last hour of trade.</p>.<p>This is the lowest the Indian rupee has touched since November 1, 2018, when it had closed at 73.46 against the greenback. This also happens to the first time that the rupee has closed below the psychological 73-mark in the past 15 months.</p>.<p>In the three trading sessions, the rupee has now lost 2.2% or 159 paise against the US dollar, as foreign funds continue to sell-off from the Indian markets. </p>.<p>The depreciation is even more worrisome as the month of March is typically good for the Indian rupee as remittances, from both individuals and companies tend to buoy the exchange rate.</p>.<p>According to IFA Global, a broker and advisor on forex, in the last 10 years, on seven occasions the rupee has seen appreciation against US Dollar. However, this time, as foreign funds are dumping riskier assets in the emerging markets due to the spread of coronavirus, the rupee has been showing a huge slide.</p>.<p>"It could be due to foreign outflows and risk aversion for emerging market assets and currencies due to the uncertainty and concerns surrounding the spread of coronavirus. The strength of the US dollar has also been a factor," said Kavita Chacko, Senior Economist at CARE Ratings.</p>.<p>In the past three trading sessions, the FIIs have ended up being net sellers in the Indian markets with withdrawals of close to Rs 6,200 crore. In the current calendar year, the foreign investors have pulled out a net of about Rs 23,000 crore from Indian markets. </p>.<p>The analysts, as a result, are also revising near term targets for the rupee towards lower levels. The five economists that DH spoke to, predicted the rupee to be near the 74-mark against the US dollar. The lowest that rupee has touched ever has been 74.28 (intraday), on October 5, 2018.</p>.<p>"The extent to which the depreciation persists will be driven by incoming data on the spread of the outbreak. It is likely duration and impact on the Indian economy," said Aditi Nayar, Principal Economist at ICRA. </p>.<p>This is likely to put pressure on India's import bill, despite the massive correction in crude oil prices. </p>.<p>"The decline in crude oil prices could offset to an extent the depreciation in the currency," Chacko said. The prices of Brent futures in the International markets have fallen by a whopping 24% in the past two months. </p>.<p>It will also lead to a hike in many consumer durables that are being imported, including smartphones.</p>
