The rupee declined 40 paise to 60.17 against the dollar on Thursday because of lack of clarity in the Union Budget on how the government proposes to reduce the fiscal deficit and higher borrowing programme.

The government revised upwards the market borrowing to a gross ₹6 lakh crore from ₹5.63 lakh crore estimated in the interim budget.

Moodys’ doubt Moodys’ Investors Service and Fitch Ratings expressed doubts over the government’s ability to meet the fiscal deficit target, pointing to the lack of specific details on ways to meet spending and revenue projections.

Ahead of the budget announcement, the rupee opened higher at 59.70 (from Wednesday’s close of 59.77) after which it declined to 60.21 at the Interbank Foreign Exchange market due to heavy capital outflows.

BSE-benchmark Sensex ended weaker by 72 points (0.28 per cent) at 25,372.75 points, after surging over 400 points in the afternoon trades.

Intra-day, the rupee moved 63 paise, rising to 59.58 but pared gains to 60.21 towards the end of the trading session.

“The Rupee is likely to continue trading in range-bound current levels of 59.50 to 60.10 to the dollar in the near term. In the medium-term range, the USD/INR pair is likely to trade with a slight depreciation bias in the band of 60-62,”said Hariprasad MP, Senior Vice-President, Head Treasury, CentrumDirect Ltd.

Call rates and bonds The inter-bank call money rates, the rate at which banks borrow short-term funds from each other to tide over liquidity mismatches, ended lower at 8.20 per cent from the previous close of 8.75 per cent on Wednesday.

The benchmark 8.83 per cent government security which matures in 2023, dropped to ₹100.39 from ₹100.63. Yields rose to 8.76 per cent from 8.72 per cent.

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