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Rupee weakens a bit against dollar on Wednesday

18 Mar 2020 Evaluate

Indian rupee pared most of its early losses but still weakened marginally against the American currency on Wednesday, due to fresh dollar demand from banks and importers. Investor sentiment remained fragile amid concerns over the impact of coronavirus. Some concern also came as S&P Global Ratings lowered India's economic growth forecast to 5.2% for 2020, saying the global economy is entering a recession amid the coronavirus pandemic. However, traders took some support with Fitch Solutions’ report that it expects the Reserve Bank of India to cut key interest rates by 175 basis points during the fiscal year starting April 1, up from earlier estimate of 40 bps reduction, to combat the economic shock from the coronavirus outbreak. It also forecast India's real GDP growth to pick up slightly to 5.4 percent in 2020-21, from its estimate of 4.9 percent in the current fiscal. On the global front, dollar extended its gains on Wednesday and hit new multi-year highs against both the Australian and New Zealand dollars, as companies and investors worried by the coronavirus outbreak rushed to the world's most liquid currency.

The last traded price of rupee was 74.26, 2 paise weaker from its previous close of 74.24 on Tuesday. The currency touched a high and low of 74.42 and 73.92 respectively. The reference rate for the dollar stood at 74.03 and for Euro stood at 82.65 on March 17, 2020. While the reference rate for the Yen stood at 69.50, the reference rate for the Great Britain Pound (GBP) stood at 90.53.

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