Indian rupee continued to slide against the US dollar for the third day in a row on Tuesday, on sustained demand of the American currency. Traders were cautious with India Ratings’ report warning that with populist decisions like farm loan waivers and other financial support schemes likely to gain significance in the run-up to the forthcoming next general elections, aggregate fiscal deficit of the states is expected to reach 3.2 per cent in FY20. It expects the states’ revenue account on aggregate to clock a deficit of 0.5 per cent of Gross Domestic Product (GDP) in FY20 due to a higher growth in revenue spends than revenue receipt. Besides, a weak trend at Dalal Street coupled with US dollar’s gain against other currencies overseas weighed on the local unit. On the global front, dollar held at a near three-week high on Tuesday as investors sought the relative safety of the U.S. currency after the International Monetary Fund cut its forecasts for the world economy in 2019 and 2020.
Finally, the rupee ended at 71.44, 16 paise weaker from its previous close of 71.28 on Monday. The currency touched a high and low of 71.47 and 71.18 respectively. The reference rate for the dollar stood at 71.37 and for Euro stood at 81.04 on January 22, 2019. While the reference rate for the Yen stood at 65.23, the reference rate for the Great Britain Pound (GBP) stood at 91.89.
