This is the third consecutive session of loss for the local unit, during which it has fallen by 63 paise.
Recording its third straight session of loss, the Indian rupee on January 27 closed down 30 paise at 75.08 (provisional) against the US dollar, tracking the strength of the US currency following the US Fed policy stance.
Forex traders said sluggish domestic equities, sustained foreign fund outflows and firming crude oil prices also weighed on the local unit.
In the interbank forex market, the local currency opened at 75.18 against the greenback and witnessed an intra-day high of 75.07 and a low of 75.31 during the session.
The rupee finally closed at 75.08, down 30 paise over its previous close.
On Tuesday, the rupee had closed at 74.78 against the US dollar.
Forex and equity markets remained closed on Wednesday on the occasion of Republic Day.
This is the third consecutive loss session for the local unit, during which it has lost 63 paise.
“The Indian rupee depreciated against the US dollar largely on risk-off sentiments following the US Fed’s tough stance,” said Dilip Parmar, Research Analyst, HDFC Securities.
As expected, the Fed had indicated a rate hike in March. As a result, the dollar gained after higher Treasury yields. On the domestic front, India’s 10-year benchmark bond yield rose to 6.74%, the highest since 2019, Parmar said.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.33% higher at 96.79.
Global oil benchmark Brent crude futures fell 0.01% to $89.95 a barrel.
On the domestic equity market front, the BSE Sensex closed 581.21 points or 1% lower at 57,276.94, while the broader NSE Nifty fell 167.80 points or 0.97% to 17,110.15.
Foreign institutional investors remained net sellers in the capital markets on Tuesday as they sold shares worth Rs 7,094.48 crore, according to exchange data.
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