Budget boost: Rupee rises 8 paise to 82.96 against US dollar
Finance Minister had hinted at faster fiscal consolidation and lower borrowings in the interim Budget for 2024-25
Mumbai, Feb 1 (PTI) The rupee appreciated by 8 paise to close at 82.96 against the US dollar on Thursday after the government hinted at faster fiscal consolidation and lower borrowings in its interim Budget for 2024-25.
However, a strong greenback against major rivals overseas and subdued domestic equity markets restricted the sharp gain in the domestic unit, forex traders said.
Finance Minister Nirmala Sitharaman on Thursday hiked capital expenditure by 11 per cent for the next fiscal to sustain a world-beating economic growth rate while trimming the deficit in a reform-oriented interim budget At the interbank foreign exchange, the rupee opened at 83.02 against the dollar. During the session, the local unit touched a high of 82.93 and a low of 83.03.
Continuing on the fiscally prudent path, the Modi government in the interim Budget refrained from announcing populist measures, which will help it trim the fiscal deficit to 5.1 per cent of the GDP next fiscal and 4.5 per cent in FY26.
The interim Budget has prioritised pragmatism over populism by focusing on higher capex and faster fiscal consolidation. The math not only projects a better-than-budgeted deficit target for FY24 but also pegs the FY25 goalpost at a narrower 5.1 per cent against expectations of 5.3-5.4 per cent, Radhika Rao, senior economist at DBS Bank, said.
The rupee finally settled at 82.96 against the US dollar, registering a gain of 8 paise over its previous close.
On Wednesday, the rupee appreciated 6 paise to 83.04 against the US dollar.
The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.45 per cent higher at 103.55.
Brent crude futures, the global oil benchmark, surged 0.92 per cent to USD 81.29 per barrel.
In the domestic equity market, Sensex declined 106.81 points or 0.15 per cent to end at 71,645.30, while the wider Nifty fell 28.25 points or 0.13 per cent to 21,697.45.
Meanwhile, India's manufacturing sector growth climbed to a four-month high in January as a sharper upturn in new orders boosted output growth amid mild cost inflation, a monthly survey said on Thursday.
Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Wednesday as they purchased shares worth Rs1,660.72 crore, according to exchange data.
