Indian rupee edged slightly higher against the greenback on Tuesday, a day after the domestic unit hit the lowest level since December 17 on account of fiscal slippage concerns.
At 09:10 AM, the rupee was trading at 71.74 a dollar, up 6 paise from its Monday’s close of 71.80. The home currency opened at 71.70 and touched a high and a low of 71.68 and 71.76 a dollar, respectively.
The rupee on Monday dropped by 55 paise to close at 71.80 to the US dollar ahead of the Reserve Bank of India’s policy review meet. This was the second straight session of loss for the domestic unit, during which it lost a total 72 paise.
The fall also came as investors became worried about fiscal slippage after the interim Budget unveiled some big populist measures ahead of the general elections.
The interim Budget pegs fiscal deficit slipping by 10 basis point to 3.4 percent for the current year, owing to an income support scheme for farmers and expects it to stay at the same level in FY20 as well.
Global credit rating agency Moody's said the inability to meet fiscal deficit target for four consecutive years as a big "credit negative" for the sovereign.
The domestic currency remained rangebound today, on account of steady US dollar and ahead of the next meeting of RBI’s monetary policy statement on February 7.
The dollar index, which measures the greenback against a basket of six major currencies, was barely changed at 95.828 after gaining for three straight sessions.
In commodity markets, oil prices inched up on Tuesday, buoyed by expectations of tightening global supply amid U.S. sanctions on Venezuela and production cuts led by OPEC.
Brent crude futures were last up 0.4 percent at $62.77.
Meanwhile, foreign funds sold shares worth Rs 112.13 crore from the capital markets on a net basis Friday, while domestic institutional investors sold shares worth Rs 65.22 crore, provisional data showed.
In debt markets, the yields on the 10-year government bonds up 0.4 percent to 7.41 percent from its previous close of 7.38 percent. Bond yields and prices move in opposite directions.
First Published: IST