Rupee slides 43 paise on risk aversion ahead of Budget, Fed statement

Govt bond yields decline ahead of Budget statement as traders feel the fall in prices over the past week had been overdone

The rupee weakened sharply versus the dollar on Tuesday, as investors turned risk averse and sought the safety of the US currency ahead of two crucial events on Wednesday – the Union Budget and the Federal Reserve’s monetary policy statement.

The domestic currency settled at 81.93 per dollar against 81.50 on Monday. Intraday, the rupee weakened past the psychologically significant 82 per dollar mark, hitting a low of 82.07 per dollar.

Government bond yields declined ahead of the Budget statement as traders were of the view that the fall in prices over the past week had been overdone, dealers said.