Indian rupee ended marginally lower against dollar on Tuesday, due to fresh demand for the American currency from banks and importers. Trading sentiments remained weak with India Ratings and Research (Ind-Ra) stating that the aggregate fiscal deficit of states will touch 3 per cent gross domestic product (GDP) in FY20 against the budgeted figure of 2.6 per cent. The fiscal slippage will originate from a decline in tax revenue, a lower nominal GDP and higher expenditure. Subdued domestic equity markets and high crude oil prices also weighed on the domestic unit. However, losses remain capped as some optimism remained among the traders with Secretary in the DPIIT Guruprasad Mohapatra’s statement that enthused by a record foreign investment inflow, India is optimistic of continuing to be one of the world's favourite FDI destinations in 2020 on the back of the Modi government's liberalised norms and a significant jump in the ease of doing business ranking. On the global front, euro and British pound rose as the dollar weakened on Tuesday as investors saw global growth improving next year, with the United States and China due to finally sign a Phase 1 trade agreement this week.
Finally, the rupee ended at 71.36, 5 paise weaker from its previous close of 71.31 on Monday. The currency touched a high and low of 71.37 and 71.23 respectively. The reference rate for the dollar stood at 71.34 and for Euro stood at 79.88 on December 30, 2019. While the reference rate for the Yen stood at 65.37, the reference rate for the Great Britain Pound (GBP) stood at 93.55.
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