Rupee slumps 27 paise to close at 3-week low

Mumbai: The rupee depreciated by 27 paise to close at nearly three-week low of 73.95 against the US dollar Wednesday as the American 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 government and the RBI weighed on the local unit. “Multiple reports of the government invoking Section 7 of the RBI Act to issue directives to the RBI and also rumour about the likely resignation of the RBI Governor had the markets worried, and even pushed the rupee lower beyond the Rs 74 level,” said Joseph Thomas, Head Research- Emkay Wealth Management. After opening lower at 73.91, the rupee had plunged to the day’s low of 74.14 as investors turned nervous over reports of rift between the RBI and the government.
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. (PTI)