Investors were cautious after Finance Minister Nirmala Sitharaman said the government would borrow around Rs 11.6 lakh crore from the market to meet its expenditure requirement.
The rupee cut its opening gains and closed 17 paise lower at 74.82 (provisional) against the US dollar on Tuesday on higher-than-expected borrowings in the next fiscal.
Investors were cautious after Finance Minister Nirmala Sitharaman said on Tuesday that the government would borrow around Rs 11.6 lakh crore from the market to meet its expenditure requirement in 2022-23, forex traders said.
In addition, Govt. Said that the fiscal deficit will be 6.9% of GDP in 2021-22 and 6.4% in 2022-23, and this also affected sentiments.
At the interbank foreign exchange, the rupee opened at 74.53 against the US dollar, clocking 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.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.19% lower at 96.35.
On the domestic equity market front, the 30-share Sensex closed 848.40 points or 1.46% higher at 58,862.57, while the broader NSE Nifty ended 237.00 points or 1.37% higher at 17,576.85.
Global oil benchmark Brent crude futures fell 0.94% to $88.42 a barrel.
Foreign institutional investors were net sellers in the capital markets on Monday as they sold shares worth Rs 3,624.48 crore, according to stock exchange data.
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