Continuing its fall for the third straight day, the rupee declined sharply against the US currency ending lower by 19 paise at 67.45 amid unconfirmed reports saying that RBI Governor Raghuram Rajan might not be interested in a second term.
Strong dollar overseas and renewed capital outflows also weighed on the rupee trade.
The domestic currency had opened a tad higher at 67.24 from yesterday's closing level of 67.26 at the Interbank Foreign Exchange (Forex) market on bouts of dollar selling from banks and exporters.
Maintaining its solid rising momentum, it touched a fresh intra-day high of 67.1125 following a sharp rebound in local equities even encouraging macroeconomic indicators supported the early move.
However, rupee took a sudden reversal in mid-afternoon trade following heavy dollar demand and plunged to hit a fresh intra-day low of 67.4625 before closing at 67.45, showing a fall of 19 paise, or 0.28 per cent.
The rupee has lost 42 paise in three-day fall.
While unconfirmed reports said that Rajan might not be interested in a second term as RBI Governor, a top Finance Ministry official today said there has been no discussion so far on extension to Rajan, and that his fate would be decided closer to the end of his current tenure in September.
Meanwhile, India's GDP grew 7.9 per cent in the January-March quarter of 2015-16, taking the overall economic growth to a five-year high of 7.6 per cent for the entire fiscal, maintaining its position as the world's fastest expanding major economy.
Core infrastructure sectors also grew at an over four-year high rate of 8.5 per cent in April.
The RBI fixed the reference rate for the dollar at 67.3526 and for euro at 74.9634.
In cross-currency trades, the rupee bounced back against the pound sterling and settled at 97.37 compared to 98.46 earlier.
The domestic unit, on the other hand moved down further against the euro to finish at 75.30 against 75.10 and also remained weak against the yen to close at 61.72 per 100 yens from 60.58 yesterday.
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