Indian rupee has weakened by nearly 0.5% to hit a low of 74.145 against the US dollar. This is the weakest level since Oct.11 when it hit record low level of 74.48.
Rupee weakened amid signs of tensions between RBI and government. There are reports that government may invoke Section 7 of the Reserve Bank of India Act of 1934 which allows government to give directions to central bank on matters of public interest.
Also weighing on rupee is slowdown in Chinese economy which has dented outlook for emerging markets. China's manufacturing PMI fell from 50.8 to 50.2 as against market expectations of 50.6. Trade concerns are also high as US has threatened to impose import tariffs on rest of Chinese goods if trade talks in November do not result in a deal.
The US dollar index has risen to June 2017 high on upbeat economic data, concerns about European economies and dovish stance of Bank of Japan.