MUMBAI, April 7 Reuters The Indian rupee lost 1.5 on Wednesday, suffering its biggest singleday fall in 20 months as the central bank mapped out plans for a massive government bond buying programme.

The partially covertible rupee ended at 74.55 per dollar versus its previous close of 74.43, marking the biggest daily fall since Aug. 5 2019. Earlier, the rupee touched 74.5550, its weakest since Nov. 17.

The Reserve Bank of India RBI kept interest rates at record lows on Wednesday but its commitment to a massive government bond purchase programme raised prospects of plenty of rupee liquidity, and potential inflation, both of which undermined sentiment toward the currency.

The forex market wasnt expecting such a dovish stance and rupee got set on fire, said Rahul Gupta, head of currency research at Emkay Global Financial Services, who now expected the exchange rate to trade between 73.5074.50 rupees per dollar.

Reporting by Swati Bhat; Editing by Simon CameronMoore

Source Reuters