Rupee slumps 23 paise, settles below 74 against US dollar

The rupee continued its downward journey on Thursday, sliding another 23 paise to settle at 74.10 against the US dollar, tracking weak domestic equities and strong American currency amid global risk aversion.

At the interbank forex market, the domestic unit opened weak at 74.02 against the greenback, then lost further ground and finally closed at 74.10 against the American currency, showing a fall of 23 paise over its previous close.

On Wednesday, the rupee depreciated by 16 paise to settle at more than one-month low of 73.87 against the US currency.

The local unit witnessed an intra-day high of 73.94 and a low of 74.16 against the greenback.

"The slide for the rupee continues, as it slips below the 74 against US dollar level, the rupee is now trading at a 2-month low. The US dollar has strengthened as investors flock to a safe haven in times of uncertainty.

“The rising number of Covid-19 cases has forced governments in a few EU countries to enforce lockdown," said Nish Bhatt, Founder and CEO, Millwood Kane International - an Investment consulting firm.

Bhatt further said that reports are emerging that the Indian government is finalising the next stimulus package to boost sentiment and bring growth back on track. "Going forward a clear outcome from the US election, clarity on stimulus package from the US, and the Indian government will guide the INR," Bhatt said.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.09 per cent to 93.49.

On the equity market front, BSE index Sensex was trading 291.74 points lower at 39,630.72, and the broader NSE Nifty fell 80.45 points to 11,649.15.

Foreign institutional investors were net sellers in the capital market as they offloaded shares worth Rs 1,130.98 crore on a net basis on Wednesday, according to exchange data.

Brent crude futures, the global oil benchmark, fell 0.87 per cent to $38.78 per barrel.