Rupee opens on flat note against US dollar in early trade

Analysts said that traders remained cautious ahead of Reserve Bank of India (RBI) monetary policy outcome to be announced on Friday.

Mumbai: The rupee opened on a flat note and edged higher by a marginal 1 paisa at 73.01 against the US dollar in opening trade on Tuesday, as forex market participants cautiously await the RBI policy outcome after the Union Budget.

Analysts said that traders remained cautious ahead of Reserve Bank of India (RBI) monetary policy outcome to be announced on Friday.

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At the interbank forex market, the domestic unit opened at 73.02 against the US dollar and inched higher to 73.01 against the greenback, registering a rise of just 1 paisa over its previous close.

On Monday, the rupee had settled at 73.02 against the American currency.

The rupee is trading in a narrow range amid upbeat risk tone and worries over the impact of Monday’s Union Budget, Reliance Securities said in a research note.

“With the budget out of the way, markets will now look ahead to the RBI’s monetary policy this week for further cues,” the note added.

Sitharaman on Monday said the government estimates fiscal deficit of 6.8 per cent of the GDP in the next financial year beginning April 1.

Fiscal deficit is an indication of the government’s borrowing to meet the shortfall between expenditure and receipts from taxes and other sources.

The fiscal deficit in 2020-21 is estimated to soar up to 9.5 per cent due to rise in expenditure on account of the outbreak of COVID-19 and moderation in revenue during this fiscal year.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.10 per cent to 90.89.

On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 1475.01 points higher at 50,075.62, and the broader NSE Nifty climbed 433.90 points to 14,715.10.

Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 1,494.23 crore on a net basis on Monday, according to exchange data.

Brent crude futures, the global oil benchmark, rose 0.91 per cent to USD 56.86 per barrel.