Rupee slumps 27p to close at 3-week low

The rupee depreciated by 27 paise to close at a near threeweek low of 73.95 against the US dollar on Wednesday, as the US currency strengthened against major global currencies overseas amid steady capital outflows.

Forex traders said increased demand for the US currency from importers, and concerns around the rift between the Centre and the Reserve Bank of India weighed on the local unit.

"Multiple reports of the government invoking Section 7 of the RBI Act to issue directives to the RBI, and rumours about the likely resignation of the RBI Governor, had the markets worried and even pushed the rupee lower beyond the 74 level," said Joseph Thomas, Head (Research), Emkay Wealth Management.

However, the rupee pared some of its losses to reach the day’s high of 73.79 after the Finance Ministry in a statement stressed that the government has "nurtured and respected" the autonomy of the central bank and has been holding extensive consultations with it on many issues.

The rupee finally settled down 27 paise, or 0.37 per cent, at 73.95 — a level not seen since October 11. The rupee on Tuesday had depreciated 23 paise to close at 73.68.

The currency, which touched the all-time low of 74.39 in October, closed the month with total losses of 104 paise or 1.43 per cent on the back of a strengthening dollar, firming oil prices and trade worries.

Globally, Brent crude — the international benchmark — was trading 0.45 per cent higher at $76.25 per barrel.