The rupee on Monday continued its downward journey as the currency slid below the psychological mark of 74 against the US dollar. The currency markets crashed tracking weak opening in domestic equities amid mounting fears of a coronavirus-led economic slowdown. The currency opened at 74.03, down 25 paise, as compared to the previous closing mark and deteriorated further to hit an intra-day low of 74.18. At 1:40 pm, rupee was trading at 74.12 against the greenback.
Forex traders said weak opening in domestic equities and foreign fund outflows dragged the local unit. Though weakening of the American currency in the overseas market and easing crude oil prices supported the rupee, but traders believe there is mounting fears of recession in major economies due to the coronavirus outbreak and this could weigh on the local unit.
Meanwhile, a crash in oil prices added to the panic with energy firms taking a hammering and wiping hundreds of billions off valuations. Driving the declines was a ferocious sell-off in the oil markets, sparked by top exporter Saudi Arabia slashing prices — in some cases to unprecedented levels — after a bust-up with Russia over production. Both main oil contracts — which had already been under pressure over falling demand caused by the virus — dived around 30 percent, marking the worst drop since the 1991 Gulf War and the second biggest fall on record, according to Bloomberg News.