Rupee opens 22 paise weaker at 73.90/$ as RBI-govt rift widens

The rupee Tuesday depreciated by 23 paise to close at 73.68 against the US dollar in line with fall in equities amid steady capital outflows.

The dollar strengthened to a three-week high versus the Japanese yen at 113.21 while Brent crude futures gained 36 cents, or 0.5 percent, to $76.27 a barrel by 0110 GMT

The currency was under pressure amidst growing furor between the RBI and the government. The central bank governor Urjit Patel is considering all options including resigning from his post following an unprecedented attack on the RBI’s functioning by Finance Minister Arun Jaitley, sources told CNBC-TV18.

Unabated capital outflows by foreign funds continued to dampen the sentiment, according to market experts.

Foreign investors also pulled out Rs 2,230.79 crore from capital markets Monday amid the dollar hovering near 10-week high and hitting 96.66 against the basket of six global currencies.

The rupee is the worst performing emerging market currency having lost almost 15 percent since January this year. Between April and September the rupee has plummeted more than 7 percent to the dollar.

In debt markets, the yields on the 10-year government bonds rose 0.73 percent to 7.89 percent after closing at 7.83 percent on Tuesday. Bond yields and prices move in opposite directions.