Rupee in Wednesday's trade opened still lower and was last quoting 72.033. Experts perceive the rupee to narrow down further due to twin blow of Urjit's Patel sudden exit as well as the loss of Prime Minister's ruling party in key state election. Rupee bulls are being also affected on the back of rising crude oil prices which have got support from the OPEC decision to cut output beginning January.
At the opening rupee dropped to a low of 72.20 but soon gained some strength. Also, appointment of the new RBI governor Shashikanta Das for 3 year term has been taken positively by the bond market which has rallied, following which bond yield has declined to 7.45%.
So, in all possibility it is suggested that rupee's upward momentum is unlikely to continue as also the crude price is in all probability will scale higher. Till year to date, rupee has lost in value by 11 odd percentage.
Also, with the sudden resignation of Urjit, foreign investors have concerns raised around economic policy continuity as well as the RBI's independence. And whether or not the newly appointed governor will be able to come out with a swift resolution on the rift between the centre and the RBI.
And any breach of 73 mark will propel the domestic currency to further lose to 74 per US dollar.