New Delhi, Oct. 7 -- The Indian rupee weakened sharply against the US dollar on Wednesday despite the Reserve Bank of India raising interest rates for the first time since February 2023, as elevated crude oil prices, higher global bond yields and importer demand outweighed the support normally expected from tighter monetary policy.

The rupee was trading around 96.78 against the US dollar at 3.30 pm, after opening at 96.42 and touching an intraday low of 96.85.

The move stood out because higher domestic interest rates generally tend to support a currency by improving the relative return on rupee-denominated assets.

The RBI on Wednesday raised the repo rate by 25 basis points to 5.50 per cent, its first increase since February 2023.

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