Rupee slips 17 paise to close at 74.82 against dollar on higher borrowing

The 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.

Investors were cautious after Finance Minister Nirmala Sitharaman on Tuesday said 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.

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.

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.

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.