The rupee on Tuesday surged by 49 paise to close at 75.64 against the US dollar, following a rally in stock markets. At the interbank foreign exchange, the rupee opened at 75.92 and gained further ground to touch the day's high of 75.60. The Indian unit finally settled at 75.64, registering a rise of 49 paise over its previous close.
The Reserve Bank of India (RBI) has reduced the timing of market hours for call money market, government securities market, currency market from April 7 to April 17 (from 10 am to 2 pm) following the unprecedented situation that has emerged due to the spread of coronavirus.
The forex market was closed on Monday on account of Mahavir Jayanti.
Traders said investor sentiments remain fragile amid concerns over the impact of coronavirus outbreak on the domestic as well as global economy.
The number of deaths around the world linked to the new coronavirus has crossed over 74,000. In India, over 4,400 coronavirus cases have been reported so far.
Meanwhile, domestic stocks rallied on Tuesday with benchmark index Sensex going past the key 30,000-level. The 30-share index surged over 2,476 points, the biggest single-day gains in absolute terms, amid a broad-based rally in global equities.
Foreign institutional investors (FIIs) remained net sellers in the capital market, as they sold equity shares worth Rs 1,960.97 crore on Friday, according to provisional exchange data.
Brent crude futures, the global oil benchmark, rose 1.54 per cent to USD 33.56 per barrel.
Meanwhile, the dollar index, which gauges the greenback's strength against the basket of six currencies was trading 0.56 per cent down at 100.12.
The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 75.8276 and for rupee/euro at 82.2168. The reference rate for rupee/British pound was fixed at 93.8816 and for rupee/100 Japanese yen at 70.27.
"Recent appreciation seems like a short-term breather for the rupee, considering a rebound in global and local equities has calmed investors' nerves a bit.
However, the bias still remains downwards, considering weak sentiments and that the impact of the virus will be felt in the coming quarters," said Sugandha Sachdeva, VP-Metals, Energy & Currency Research, Religare Broking.
Sachdeva further said "for now, the rupee bulls can contend with the fact that the unit hasn't breached the crucial level of 76.25. Broadly, the rupee is likely to trade in the 75.40-76.25 band in the near term. If 76.25 mark is breached, rupee looks poised to depreciate towards 77.50 eventually."
"For time being we can see time and price correction looking at the risk-on mood back after the number of cases is lowering and medical treatment successful. Many equity indices have jumped 5-10 per cent in just a couple of days," said Devarsh Vakil, Head - Advisory (PCG), HDFC Securities said.
Vakil further said, "At domestic front, we may see MSCI rebalancing related flow in coming days which could support the rupee".