Rupee drops by 19p to 1-wk low against dollar on fiscal deficit concerns

Domestic stocks advanced in early trade which supported the rupee. The key indices Sensex and Nifty, however, closed marginally down due to sell-off in financial counters

The rupee on Monday declined by 19 paise to close at a one-week low of 75.73 against the US dollar due to fiscal deficit concerns as the government raised its market borrowing programme for 2020-21 in view of Covid-19 pandemic.

Forex traders said while positive domestic equities supported the local unit, market participants were concerned about the impact of increased borrowing on the fiscal deficit.

A foreign brokerage on Monday estimated the fiscal deficit to come at 5.8 per cent of the GDP in 2020-21 as against the budget target of 3.5 per cent as the government increased the borrowing