Rupee logs 1st drop in five days

New Delhi Snapping its four-day winning streak, the Indian rupee on Friday settled with a marginal 2 paise loss at 74.09 against the US dollar amid concerns over economic recovery in view of mounting Covid-19 cases in the country.

At the interbank forex market, the local unit opened at 74.03 against the greenback and witnessed an intra-day high of 73.95 and a low of 74.12. It finally ended at 74.09 against the American currency, registering a fall of 2 paise. For the week, the domestic unit strengthened 1.22 per cent or 92 paise against the dollar. However, for the month, the rupee weakened by 97 paise or 1.32 per cent.

"The forex market has factored in the Covid-related shortfall in economic output, but if the situation goes out of control, then we may again see an increase in USD-INR bids," said Rahul Gupta, Head Of Research- Currency, Emkay Global Financial Services. According to Sriram Iyer Senior Research Analyst at Reliance Securities, for the month the rupee weakened against the US Dollar as a resurgence of a deadly second wave of Covid-19 cases in the country intensified worries that an economic recovery may be delayed.

Additionally, the currency also came under pressure this April after the Reserve Bank of India announced its own quantitative easing-styled bond purchases and some believed that the plan could turn inflationary. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.22 per cent to 90.80.