Mumbai: The Indian rupee on Tuesday closed at a near seven-month low against US dollar as the country’s trade deficit widened.

Also the US Treasury department said that it would be adding India to the list of countries that it considers as potential currency manipulators dampened the sentiment.

The home currency closed at 65.65 against US dollar -- a level last seen on 27 September 2017, down 0.23% from its Monday’s close of 65.49. The rupee opened at 65.46 a dollar and touched a low of 65.69 a dollar.

On Friday, India’s trade deficit came in at $13.7 billion in March, climbing from $11.98 billion in February and more than the $12.3 billion deficit median estimate of 25 economists surveyed by Bloomberg. Exports in March fell 0.7%, while imports rose 7.2% from a year ago.

The rupee is under pressure due to external volatility such as rise in US bond yields, oil prices, geopolitical concerns and a threat of trade war. Slowing inflows into local financial markets and the widening current account deficit have also weakened the sentiment.

Benchmark Sensex Index rose 0.26% or 89.63 points to 34,395.06 points. Year to date, its up 1%.

Yields on 10-year government bond stood at 7.489% from its previous close of 7.49%. Bond yields and prices move in opposite directions.

So far this year, the rupee has fallen 2.48%, while foreign investors have bought $1.98 billion and $679.40 million in equity and debt markets, respectively.