It reiterated that pilgrims require a Haj visa and it can be obtained through recognised official channels
In the worst single-day retreat in history for stocks, the NSE Nifty 50 index tanked 12.98 per cent to a near four-year closing low of 7,610.25, while the S&P BSE Sensex fell 13.15 per cent to 25,981.24.
The rupee dived past 76.2 per dollar, or 20.79 per dirham, for the first time, and settled 1.2 per cent down at 76.08 at around 3.40pm from its previous close of 75.20 as several districts went into lockdown to contain the virus in line with government directives.
Trading in Indian equities was curbed in the first hour of Monday's session as the main indices plunged 10 per cent, and resumed 45 minutes later.
Global financial markets were also hit hard on Monday as nations resorted to lockdowns, threatening to overwhelm policymakers’ frantic efforts to cushion what is likely to be a deep global recession.
In the wake of the market and currency plunge, the Reserve Bank of India said it would conduct term repo operations of Rs1 trillion in two equal tranches on March 23 and March 24 in another move to ensure adequate liquidity in the system.
"As a preemptive measure to tide over any frictional liquidity requirements on account of dislocations due to Covid-19, the Reserve Bank of India has decided to conduct fine-tuning variable rate Repo auctions for Rs1000 billion in two tranches," an RBI statement said.
Currency analysts said the Indian currency remained under mounting pressure amid huge outflows from the capital market. The rupee is likely to test 76.50 any time now in such a risk-averse situation, when investors are unloading equities, bonds and currency.
Adeeb Ahamed, managing director of Abu Dhabi based Lulu Financial Group, said although the RBI has introduced several positive measures in the last one week, the entire global scenario is vulnerable with countries locking down to contain the virus.
“This has put emerging market currencies such as the rupee under pressure, with investors selling assets and opting for the relative safety of the dollar. This is as expected, and it's difficult to forecast at this stage how things will shape up tomorrow and later this week, with panic growing, and more and more governments making crucial decisions in line with the evolving situation of the pandemic," Ahamed said.
Sajal Gupta, head Forex and Rates, Edelweiss Securities, said markets are expecting some strong policy measures as has been done globally to improve sentiments and provide support to markets.
Analysts said the fall in the rupee comes even as the RBI has been heavily intervening in the spot market. The RBI provided $2 billion of dollar liquidity via a forex swap lasts Monday and is expected to provide a similar line today.
issacjohn@khalejtimes.com
It reiterated that pilgrims require a Haj visa and it can be obtained through recognised official channels
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