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Rupee settles 78 paise higher at 75.16 a dollar on stimulus boost

Mumbai, Mar 26 (PTI) The Indian rupee surged by another 78 paise to close at 75.16 against the US dollar on Thursday after Finance Minister Nirmala Sitharaman announced various welfare measures to tide through the coronavirus crisis.

The government on Thursday unveiled a Rs 1.70 lakh crore economic package involving free foodgrain and cooking gas to poor for the next three months, higher wages to workers and measures to boost liquidity of employees as part of measures to ease the economic impact of lockdown.

Forex traders welcomed the government initiatives and said the revival of the economy though welfare measures was very much needed as the slowdown in demand was further hit by COVID-19 pandemic.

The rupee, which opened on a positive note at 75.90, settled for the day with gains of 78 paise at 75.16 against the American currency.

During the day, the domestic unit touched a high of 75.10 and a low of 75.94.

On Tuesday, rupee had gained 26 paise to settled at 75.94 against the US dollar.

Forex market was closed on Wednesday on account of Gudi Padwa.

'Rupee rallies, playing catch-up with Asian currencies, amid a stock rally after the US Senate passes virus rescue plan. India also announced Rs 1.7 trillion spending plan as part of measures to ease the economic impact of lockdown,' said VK Sharma, Head PCG & Capital Markets Strategy, HDFC securities.

'Rupee traded strong on back of FM Sitaraman announcing measures to help the poor,' said Jateen Trivedi, Senior Research Analyst (Commodity & Currency) at LKP Securities.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.86 per cent to 100.18.

The 10-year government bond yield was at 6.22 per cent.

The domestic stimulus measures announced by the government boosted investor sentiment. However, there are still concerns over the impact of coronavirus outbreak on the domestic as well as global economy.

Global crude oil benchmark Brent fell 1.28 per cent to USD 27.04 per barrel amid concerns over global growth.

On the domestic equity market front, the 30-share BSE barometer rallied 1,410.99 points or 4.94 per cent to settle at 29,946.77. It surged over 1,564 points during the session. Similarly, the NSE Nifty finished 323.60 points, or 3.89 per cent, up at 8,641.45.

Foreign institutional investors (FIIs) remained net sellers in the capital market, as they sold equity shares worth Rs 484.78 crore on Thursday, according to provisional exchange data.

The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 76.1522 and for rupee/euro at 82.1119. The reference rate for rupee/British pound was fixed at 88.5046 and for rupee/100 Japanese yen at 68.98.

The number of deaths around the world linked to the new coronavirus has crossed over 21,000. In India, more than 600 coronavirus cases have been reported so far. PTI DRR MKJ