MUMBAI, Dec 18 (Reuters) - The Indian rupee hit its all-time low on Wednesday, pressured by strong dollar demand from importers and likely outflows from local equities, while intervention by the Reserve Bank of India curbed losses, traders said.
The rupee fell to 84.9550 against the U.S. dollar before closing at 84.9525, down 0.07%.
Weakness in regional currencies ahead of the Federal Reserve's policy decision due in U.S. trading hours also hurt the rupee alongside speculative dollar bids amid a lingering bearish bias on the local unit.
Benchmark Indian equity indexes BSE Sensex and Nifty 50 ended lower by about 0.6% each.
Worries over India's growth outlook have kept the rupee under pressure, alongside a well-supported dollar following Donald Trump's election victory.
The dollar index was last at 106.7, and has risen over 3% since the Nov. 5 election.
Despite the pressures, the rupee has fared better than most of its regional peers since then, on the back of routine interventions by the Reserve Bank of India.
The local unit is down 0.9%, while its peers have weakened between 1.8% and 4.4%.
The RBI likely sold dollars and conducted dollar-rupee buy/sell swaps on Wednesday as well, as part of its measures to support the currency.
The central bank has complemented spot market intervention with dollar-rupee buy/sell swaps in recent sessions, likely intended to prevent the impact of spot dollar sales on headline foreign exchange reserves and INR liquidity, traders said.
Globally, investors were watching out for any changes to Fed policymakers' projection of rate cuts in 2025 from the September forecast, with a 25 basis points reduction fully priced in for this meeting.
"Expectations for the final Fed meeting are well embedded: a hawkish 25bp cut to 4.25%-4.50%, meaning a possible pause in January and fewer cuts in 2025/26," Societe Generale said in a note.
Reporting by Jaspreet Kalra; Editing by Varun H K
Source: Reuters