Rupee declines 10 paise to 71.21 against dollar on GDP growth concerns, weak quarterly earnings

Mumbai: The Indian rupee logged its fourth straight loss on Tuesday, dropping another 10 paise to settle at 71.21 against the US dollar amid concerns over IMF revising downwards India's growth forecast and weak quarterly earnings.Besides, heavy sell-offs in domestic equity market for the second session in a row also impacted forex market sentiment.At the interbank foreign exchange market, the local currency opened on a weak note at 71.17. During the day, it saw a high of 71.13 and a low of 71.24.[caption id="attachment_5114261" align="alignleft" width="380"]

Representational image. Reuters.[/caption]The Indian currency finally settled at 71.21, lower by 10 paise against its previous close.The domestic unit had settled at 71.11 against the American currency on Monday."Rupee fell following sell-off in domestic equities and broad strength in the US dollar," said Gaurang Somaiyaa, Forex & Bullion Analyst, Motilal Oswal Financial Services.Somaiyaa further added that the "sell-off in the currency was triggered after the IMF trimmed its global growth forecast to 3.3 percent down from its earlier projection of 3.4 percent and also cut the 2021 forecast to 3.4 percent from 3.6 percent."The International Monetary Fund (IMF) on Monday lowered India's economic growth estimate for the current fiscal to 4.8 percent and listed the country's much lower-than-expected GDP numbers as the single biggest drag on its global growth forecast for two years.Analysts said earnings season has started and the growth has not been very encouraging."The weakness in rupee also dragged due to concerns about new strain of coronavirus in China taking toll on risk appetite," said Jateen Trivedi, Senior Research Analyst (Commodity & Currency) at LKP Securities.According to authorities, the number of people in China infected by a new SARS-like virus jumped to 291 on Tuesday.Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell by 0.13 percent to 97.47.Global crude benchmark Brent was trading 1.52 percent down at USD 64.21 per barrel.The 10-year Indian government bond yield was at 6.64 percent.On the domestic equity market front, the 30-share BSE index settled 205.10 points, or 0.49 percent, lower at 41,323.81. Likewise, the broader NSE Nifty fell 54.70 points, or 0.45 percent, to 12,169.85.Foreign institutional investors sold equities worth Rs 50.08 crore on a net basis on Tuesday, according to provisional exchange data.The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 71.0570 and for rupee/euro at 78.8766. The reference rate for rupee/British pound was fixed at 92.3305 and for rupee/100 Japanese yen at 64.49.