Currency Buzz: INR Settles Lower Post Budget

1 Feb 2022 , 05:31 PM

INR Settles Lower Post Budget The Indian rupee pared its initial gains and settled 17 paise lower at 74.82 (provisional) against US dollar on Tuesday on the back of higher-than-expected borrowing in the next financial year. The total Market Borrowings of the government for 2022-23 are estimated to stand at Rs. 11,58,719 crore. The Revised Estimates for the same for 2021-22 are Rs. 8, 75,771 crore as against the Budget Estimates of Rs. 9, 67,708 crore. The 10-year 6.54 GS 2032 bond yield ended at 6.82%, up from its previous close of 6.67% per cent. The current years fiscal deficit was revised up to 6.9 per cent from 6.8 per cent projected earlier. In the current fiscal, the government has borrowed Rs 10.47 trillion from the market, as per the revised estimate (against Rs 12.05 trillion budgeted). Further, the govt said fiscal deficit in 2021-22 will be 6.9 per cent of GDP and 6.4 per cent in 2022-23, and this also weighed on sentiments. 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, 17 paise lower than its previous close of 74.65. Meanwhile, the dollar index, which gauges the greenbacks strength against a basket of six currencies, was trading 0.19 per cent lower at 96.35.

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