USD/INR closed at 73.95 against its open at 73.91. Dollar/rupee pared gains during afternoon trades Wednesday as sentiments got a boost after the Department of Economic Affairs issued a clarification regarding round of rumours regarding growing dissent between the government and the Reserve Bank of India.
Investors sentiments are hurt as there is an obvious friction between the RBI and government, however, Patel is strong enough to fight and assert himself.
On Tuesday, Jaitley blamed the RBI for failing to stop a lending spree between 2008-2014 that left banks with huge bad debts, inflaming a row that recently erupted between the government and the central bank.
This comment was in response to RBI Deputy Governor Viral Acharya last week speech wherein he warned that undermining a central bank's independence could be "potentially catastrophic", in an indication that it is pushing back hard against government pressure to relax its policies and reduce its powers ahead of a general election due by next May.
Adding to this, global the greenback rallied to over one-year high on the back of safe-haven appeal amid trade war concerns.
Dollar index, which weighs greenback against a basket of six major currencies, traded at 97.01 Wednesday compared to 96.89 at close of Indian market on Tuesday.
The announcement could come by early December, if talks next month between US President Donald Trump and Chinese President Xi Jinping fail to ease the trade tensions.
A report released by the Conference Board on Tuesday showed a continued increase in US consumer confidence in the month of October.
The Conference Board said its consumer confidence index rose to 137.9 in October from a downwardly revised 135.3 in September.Economists had expected the consumer confidence index to drop to 136.3 from the 138.4 originally reported for the previous month.
NSE Nifty ended 1.85 percent higher at 10,386.60, while the benchmark BSE Sensex closed 1.63 percent higher at 34,442.05.