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The falling rupee touched a new low, breaching the 74-mark against US dollar on Friday, the Sensex plunged by 484.11 points or 1.38 per cent while the Reserve Bank of India (RBI) kept the repo rate (key lending rate) unchanged at 6.5 per cent.

The hit came as global oil prices continued to rise. Investors remained concerned over sustained foreign capital outflows and fears of widening current account deficit in the wake of soaring crude oil prices, said media reports.

At the Interbank Foreign Exchange (Forex) market, the local currency opened higher at 73.56 a dollar against its previous record low closing of 73.58. But, it failed to sustain the initial strength and fell back to breach the 74-mark, said reports.

The 30-share Sensex traded at 34,685.05, down 484.11 points or 1.38 per cent and the Nifty50 was at 10,410.80, with a loss of 188.45 points or 1.78 per cent on Friday afternoon. This came on the back of Thursday’s fall of 584.53 points, or 1.66 per cent, to 34,584.63 in late afternoon trade.

Oil-marketing companies led the fall in the Nifty pack after they were asked to absorb Re 1 per litre in petrol and diesel price cut out of a total of Rs. 2.5 a litre announced by the government on Thursday. Hindustan Petroleum, Bharat Petroleum and Indian Oil Corporation plunged between 14.59 and 23.61 per cent on the Nifty50 index.

The RBI kept the repo rate (key lending rate) unchanged at 6.5 per cent. Meanwhile, rupee breached the 74-mark against US dollar for the first time, hitting a new low of 74.15 against the dollar soon after the RBI announced its monetary policy.

RBI Governor Urjit Patel said that the rupee fall is moderate in comparison to emerging markets peers.

Experts had largely expected the central bank to hike the repo rate by 25 basis points or 0.25 per cent. Five of the six panel members voted to leave the rate unchanged. The reverse repo rate or the rate at which RBI borrows from commercial banks also remained unchanged at 6.25 per cent.

Anticipation of a rate hike had increased in the past month as oil prices climbed, the rupee’s slide accelerated and concerns on liquidity emerged. The RBI had last raised interest rates in two successive policy reviews in August and June this year.

The RBI retained GDP growth estimate at 7.4 per cent for fiscal year ending in March 2019.

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