The Indian rupee dropped to a life-time low against the dollar on Thursday in the wake of persistent outflows from equities and anxiety over next week's U.S. election results.
The rupee declined to a record low of 84.0925 to the U.S. dollar, inching past the all-time low of 84.0900.
"The dollar is well bid, but this seems to be a repeat of what has happened over the past few sessions. The RBI (Reserve Bank of India) is unlikely to loosen its grip on the rupee and is expected to keep it in a tight range," a trader with a private bank said.
"They (RBI) are active today as well."
The RBI's relentless intervention has helped contain the rupee's fall and helped it outperform against major Asian peers.
The central bank has sold dollars on almost all days in the last two weeks, to ensure a measured depreciation of the rupee.
The rupee's 1-month volatility is less than 1%, in contrast to other Asian currencies.
A win for Republican candidate Donald Trump next week is likely to lead to a rally in the dollar index, lift U.S. Treasury yields and undermine Asian currencies.
Further adding pressure on the local unit is the relentless foreign outflows from Indian equities this month amid relatively expensive valuations and China's stimulus plans.
Foreign investors have taken out nearly $11 billion, on a net basis, from Indian equities in October, a sharp U-turn from the $7 billion inflows in September.
The Nifty 50 index has dropped about 6.2% this month, set for its worst monthly performance since March 2020, when lockdown restrictions due to the COVID-19 pandemic triggered a global market meltdown.
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