Rupee settles 5 paise higher at 75.46 against US dollar

The rupee appreciated by 5 paise to 75.46 (provisional) against the US dollar on Wednesday as fiscal stimulus by the government bolstered investor sentiment.

Forex traders said Prime Minister Narendra Modi's Rs 20 lakh crore economic stimulus package enthused investors.

However, risk sentiments are negative and investor sentiments remain fragile over coronavirus concerns, they added.

At the interbank foreign exchange, the rupee opened on a strong note at 75.31, but during the day the domestic unit lost most of its gains and finally settled at 75.46 against the US dollar, registering a rise of 5 paise over its previous close.

During the trading session rupee witnessed an intra-day high of 75.30 and a low of 75.50.

On Tuesday, the rupee had settled at 75.51 against the US dollar.

In a big push to revive the COVID-hit economy, the Prime Minister on Tuesday announced massive new financial incentives on top of the previously announced packages for a combined stimulus of Rs 20 lakh crore.

"The surprise move of fiscal stimulus by the government had a positive impact on rupee. However, globally, risk sentiments are negative and we have no clarity over the government expenditure plan," Emkay Global Financial Services Head of Research- Currency Rahul Gupta said.

Gupta further noted that "positive comments by Finance Minister Nirmala Sitharaman may cheer rupee but it will be short-lived as the fragility over coronavirus still continues".