The US dollar is higher against the Indian rupee on Friday after Prime Minister Narendra Modi called for a nationwide curfew to take place on Sunday to combat the spread of the coronavirus in India. The rupee is still near record lows while the greenback is giving back weekly gains against other currencies.
USD/INR was higher by 37 pips (+0.50%) to 75.15 with a daily range of 74.71 to 75.19 as of 12pm GMT. The currency pair had seen an early pullback from 75 but quickly surpassed it again as the day went on. Weekly gains for the exchange rate stand at 1.78%
Indian rupee down as Modi calls for curfew
1.3 billion People will be compelled to bide by a curfew between 7am and 9pm on one-day on Sunday in attempt to stop the spread of COVID-19. There have been 173 infections and 4 deaths in India from the coronavirus. Companies in India have also been forced by States to make employees work from home when it is possible.
Enforcing the rule for so many people will be next to impossible and highlights the unique challenges faced by India in combating the virus. The difficulty of enforcement likely explains why it is just for one day. Modi said he was trying to stop the kind of “explosion” in deaths seen in other countries- presumably referencing Italy which has now surpassed China in the number of coronavirus deaths.
The rebound in oil markets might have contributed to the fall in the rupee, though the historically low price remains a big advantage for India as an oil importer. Crude oil futures are around 4% higher on Friday having jumped 24% for the biggest gain ever.
US dollar gains versus rupee but mostly lower
Outside of India there has been mixed news about the spread of the virus, and broader markets generally risk on, something that typically favours the rupee against the dollar, which is seen as a haven.
South Korea has seen the number of cases dip below 100 while China has reported another day of zero new domestically produced new infections. There have now been over 10,000 deaths from the coronavirus worldwide.