Rupee slips 17 paise to close at 74.82 against US dollar

Mumbai: The rupee pared its initial gains and settled 17 paise lower at 74.82 against US dollar on Tuesday as caution set in among forex market participants after the government in the budget revised fiscal deficit target upwards for FY’22.

The country’s fiscal deficit is projected to be higher at 6.9 per cent this fiscal as against 6.8 per cent estimated earlier, weighing on sentiment.

Investors also took note of Finance Minister Nirmala Sitharaman announcing that the government will borrow about Rs 11.6 lakh crore from the market in 2022-23 to meet its expenditure requirement, forex traders said.

At the interbank foreign exchange, the rupee opened at 74.53 against the American dollar, witnessed an intra-day high of 74.41 and a low of 74.87 against the greenback.

The local unit finally ended the day at 74.82 a dollar, 17 paise lower than its previous close of 74.65.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.19 per cent lower at 96.35.

Gaurang Somaiyaa, Forex & Bullion Analyst, Motilal Oswal Financial Services, said, “The rupee rose in the first half of the session but volatility remained low ahead of the important Union Budget that was announced today. The finance minister pegged the government’s fiscal deficit for the financial year 2022-23 at 6.4 per cent of GDP. The Budget for 2021-22 pegged the fiscal deficit for the full year at Rs 15.07 lakh crore, or 6.8 per cent of GDP, which has been revised to 6.9 per cent.”

The rupee was weighed down post the announcement of the Union Budget and focus will now shift to the RBI policy statement that will be released later next week, he added.

On the domestic equity market front, the 30-share Sensex ended 848.40 points or 1.46 per cent higher at 58,862.57, while the broader NSE Nifty settled up 237.00 points or 1.37 per cent to 17,576.85.

Global oil benchmark Brent crude futures fell 0.94 per cent to USD 88.42 per barrel.

Foreign institutional investors were net sellers in the capital market on Monday, as they offloaded shares worth Rs 3,624.48 crore, as per stock exchange data.