The USDINR pair opened briefly lower today
|The USDINR pair opened briefly lower today at 74.69 level tracking broad dollar weakness. RBI unveiled a slew of measures releasing nearly $50 Billion into the economy to fight the widespreading virus. Like other major global central banks, the Central Bank today went with emergency rate cut of 75 bps and slashed the cash reserve rate (CRR) by 100 basis points to 3% of bank deposits straight away unleashing Rs 1.37 lakh crore into the banking system for the next one year. Launch of Tltro, 1% reduction in CRR and raising MSF to inject more liquidity will be an additional boost to stimulate the economy. Banks in India that operate IFSC banking units will be allowed to participate in offshore INR NDF market w.e.f. June 1, 2020. The move follows after the Indian government put the country on a 21-day lockdown as coronavirus cases rise. India currently has 800 confirmed cases with 20 deaths. Meanwhile, domestic indices ended on a flat note amid mixed global cues and India's 10 year bond yield ended lower by 8bps to 6.14%. The Euro and Pound are trading on a flat note. British Prime Minister Boris Johnson has tested positive for coronavirus and is self isolating but will still lead the government's response to the outbreak.
USD/INR CHART (Daily Chart)
Equity market ended Friday's highly volatile session on a subdued note even as the RBI, in an emergency move, slashed the repo rate by a huge 75 bps to arrest the potential downturn in the economy due to Covid-19 pandemic. On the sectoral front, auto stocks slipped the most, thus snapping their three-day gaining streak. At close, the Sensex was down 131.18 points or 0.44% at 29815.59, and the Nifty was up 18.80 points or 0.22% at 8660.25.
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