The rupee tanked 105 paise to close at 74.47 (provisional) against the US currency on Wednesday amid concerns over surging COVID-19 cases in the country.

Meanwhile, the Reserve Bank of India maintained status quo on policy rates for the fifth time in a row.

The central bank kept its key policy repo rate unchanged at 4 per cent, but warned that the recent surge in COVID-19 infections has created uncertainty over economic growth recovery.

At the interbank forex market, the local unit opened at 73.52 against the greenback and traded in the range of 73.52 to 74.50 during the day.

The rupee finally ended at 74.47 against the American currency, registering a fall of 105 paise over its previous closing of 73.42.

"The Indian Rupee depreciated amid concern over rising COVID-19 cases in India and lockdown restriction in some states. Furthermore, Reserve bank of India kept its repo rate unchanged for the 5th consecutive policy meeting and maintained accommodative stance," said Saif Mukadam, Research Analyst, Sharekhan by BNP Paribas.

Further, the central bank said the recent surge in coronavirus cases adds uncertainty to economic growth recovery.

The number of new coronavirus cases in India hit a record daily high since the outbreak of the pandemic with over 1.15 lakh new infections being reported in a span of 24 hours, pushing the nationwide COVID-19 tally to 1,28,01,785, according to the Union Health Ministry data updated on Wednesday.

Additionally, the market remained cautious ahead of FOMC meeting minutes to get more cues on monetary policy. The rupee may trade in the range of 73.70 to 74.75 in the next couple of sessions, Mukadam noted.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.06 per cent to 92.28.

Brent crude futures, the global oil benchmark, was trading 0.53 per cent up at USD 63.07 per barrel.

On the domestic equity market front, the BSE Sensex ended 460.37 points or 0.94 per cent higher at 49,661.76, while the broader NSE Nifty advanced by 135.55 points or 0.92 per cent to 14,819.05.

Foreign institutional investors were net sellers in the capital market as they offloaded shares worth Rs 1,092.75 crore on Tuesday, according to exchange data.