Rupee falls 2 paise to close at 81.90 against US dollar as FM Nirmala Sitharaman presents Budget 2023

The Union finance minister maintained the nation’s fiscal deficit objective of 6.4 percent in the Revised Estimate for FY23 and reduced it to 5.9 percent for FY24 in her address on the budget. By 2025–2026, the fiscal deficit, according to her, is to be reduced to under 4.5 percent.

Rupee falls
Rupee falls

Following the presentation of the Union Budget for 2023–24 in the Parliament by Union Finance Minister Nirmala Sitharaman, the Indian rupee on Wednesday (February 1) gave up early gains and ended the day 2 paise worse at 81.90 (provisional) against the US dollar.

Investors reportedly remained passive, according to forex traders, as they awaited the conclusion of the US Federal Reserve meeting later that evening. The rupee began trading at 81.76 versus the dollar on the interbank foreign exchange market and ultimately closed at 81.90, down 2 paise from its previous finish.

The Economic Survey 2022–23 stated that the local unit may stay under pressure due to a plateauing of exports and the ensuing widening of the current account deficit, which caused the rupee to weaken by 36 paise on Tuesday to settle at a three-week low of 81.88 against the US dollar.

The Union finance minister maintained the nation’s fiscal deficit objective of 6.4 percent in the Revised Estimate for FY23 and reduced it to 5.9 percent for FY24 in her address on the budget. By 2025–2026, the fiscal deficit, according to her, is to be reduced to under 4.5 percent.

According to figures from the finance ministry issued on Tuesday, the government’s fiscal deficit as of December 31 reached 59.8% of the full-year Budget Estimate due to muted increase in revenue collections.

According to a monthly poll, India’s manufacturing sector activity slowed in January despite a slower growth in overall sales, and headcounts were mostly steady because there was enough workers to meet demand.

The S&P Global India Manufacturing Purchasing Managers’ Index (PMI), which is seasonally adjusted, dropped from a recent high of 57.8 in December to 55.4 in January as industrial orders and production increased more slowly.

The dollar index, which measures the strength of the dollar relative to a basket of six different currencies, was down 0.14 percent at 101.95. Benchmark Brent crude futures for world oil fell 0.26% to USD 85.24 per barrel.

The broad NSE Nifty fell 45.85 points or 0.26 percent to 17,616.30, while the 30-share BSE Sensex ended 187.31 points or 0.31 percent higher at 59,708.08. According to exchange data, foreign institutional investors (FIIs) were net sellers on Tuesday in the capital market, selling shares worth Rs 5,439.64 crore.

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