Rupee drops 7 paise against dollar on fiscal deficit fears

Mumbai: The rupee started with a loss of 7paise at 64.22 against the dollar on Thursday on concerns that the government's additional borrowing this fiscal may lead to a breach in the fiscal deficit target.

The American unit retained its appeal among importers and banks.

The government on Wednesday said it has decided to make an additional borrowing of Rs 50,000 crore this fiscal through dated securities, a move that may put burden on the fiscal deficit target of 3.2 per cent of GDP.

However, there will be no change in net borrowing as envisaged in the Budget for 2017-18, a finance ministry statement said.

Weakness in the US dollar against select currencies in the global market contained the rupee fall, traders said.

In the opening session, the domestic unit fell 7 paise to 64.22. On Wednesday, it had ended lower by 7 paise at 64.15.

The benchmark Sensex was trading higher by 63.24 points, or 0.18 per cent, at 33,975.05 in the opening session.