The Indian rupee, which has been under pressure last week due to coronavirus, a stock market crash and and the Yes Bank crisis, will depreciate further this week and could possibly hit 20.50 against the UAE dirham unless Reserve Bank of India (RBI) intervenes to prop up the currency.

The rupee, which hit 20.15 against the dirham (74.02 against the US dollar) on Friday, could cross its lowest mark of 20.24 against the UAE currency achieved in 2018, according to Rajiv Raipancholia, chief executive officer of Orient Exchange.

"This trend [of the rupee's decline] will continue in the coming week if the RBI does not intervene. We are looking at the rupee depreciating further and crossing the highest mark of 20.24 against the dirham in October 2018. It could possibly test 20.40 levels against the dirham [75 against the dollar]," said Raipancholia.

The rupee was trading at 20.16 versus the dirham late on Saturday, according to It lost 2.6 per cent against the UAE currency last week.

"The rupee depreciated sharply by more than 2.5 per cent to hit a 17-month low [last] week as investor sentiments remained fragile amid escalating worries over the impact of the rapidly-spreading coronavirus globally," said Rahul Gupta, head of research for currency at Emkay Global Financial Services.

He said going forward, the market will have a closer eye on any possible intervention from the RBI or the government, adding that on the upside, the crucial resistance lies at 74.47 against the dollar - an all-time low - and if the rupee consistently trades above 74.47 then 75-75.50 versus the dollar (20.43-20.57 against the dirham) is expected.

Raipancholia blamed the stock market crash worldwide as a result of fear of coronavirus for the fall in the rupee's value. The 30-share BSE Sensex settled 893.99 points, or 2.32 per cent, lower at 37,576 while the NSE Nifty tanked 279.55 points, or 2.48 per cent, to close at 10,989 on Friday.

"The present level of the rupee-dollar is very attractive for fresh foreign inflows and interest rates in India are still comparatively higher than other countries. Therefore, the rupee could settle at 72 against the dollar [19.60 against the dirham] in the next couple of weeks after hitting the new lows. It also depends on what level will the RBI intervene," he concluded.


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