The Indian rupee fell to a record low in the last minute of trade on Wednesday, on the back of heavy demand for the greenback and elevated US yields ahead of the Federal Reserve's rate decision due later in the day.

The fall to a record low came despite intermittent dollar selling intervention from the central bank in recent sessions.

The rupee ended at a record closing low of 83.29 after touching a lifetime low of 83.2950 earlier in the session. It had closed at 83.25 on Tuesday.

Expectations that the Fed will keep interest rates high for longer has prompted a selloff in longer-maturity Treasuries and boosted the dollar.

The Fed is not expected to tweak rates on Wednesday but there are bets of one more rate increase in December.

The drop in forward premiums, driven by concerns over dollar liquidity, also exerted additional pressure on the rupee, while equity outflows also weighed, traders said.

Foreigners have sold equities worth about $2.95 billion in October after selling $1.7 billion in September, following a six-month buying streak.

Overseas investors have bought $11.7 billion of Indian equities so far this year, a turnaround from the nearly $12 billion of outflows recorded in 2022.

Most Asian currencies fell on Wednesday with the Korean won leading losses. The dollar index was higher at 106.88.

The Indian central bank has been intervening in the non-deliverable forwards market, onshore forwards and spot market to prevent excessive volatility.

These interventions had prevented a breach of the record low in recent weeks, traders said.

The previous record low of 83.29 was hit in October last year.

Related Topics
comment COMMENT NOW