Rupee opens 20 paise up at 74.78 against dollar

The rupee on Friday opened 20 paise higher at 74.78 against the US dollar following some selling in American currency by banks and exporters.

The domestic unit on Thursday fell to a record low of 75 as the dollar surged against almost every global currency in a huge flight to safety as financial markets crack under the weight of the coronavirus pandemic.

A rising number of coronavirus cases in India are adding to local concern, pulling the currency down with Indian stock markets. The Sensex is off 2017 lows reached on Thursday’s early trade after a daily decline of over 7 per cent while the Nifty 50 is down near the lows after the November 2016 cash ban.

Data showed that investment outflows from Indian shares and bonds have topped $10 billion this month alone. On the US front, the number of Americans filing new claims for unemployment benefits surged last week by 70,000 to the highest level in more than two years, indicating that the effect of the coronavirus was starting to be felt in rising layoffs in the job market.

US Federal Reserve‘s balance sheet expanded to record $4.7 trillion this week, having increased by $356 billion in the previous week. That was the largest weekly increase ever. The sudden surge could be associated with the $1.5 trillion repo operation the bank conducted last week.