The rupee closed sideways at 84.07 against the dollar on Friday amid intervention from the Reserve Bank of India (RBI) after it hit a record intra-day low of 84.08.

The rupee has been under pressure on account of sustained outflows from foreign portfolio investors (FPIs) from the equity markets and demand for the greenback from oil companies.

Provisional data from the stock exchanges showed FPIs selling stocks worth ₹5,486 crore on Friday even as the Sensex and Nifty snapped a three-day slide to post gains.

In October, FPIs have made net sales of $2.80 billion in equities, though they have been net buyers of debt.

In the inter-bank forex market, the rupee opened at 84.06 to the dollar against the previous close of 84.07 amid a steady dollar overseas.

The Indian currency touched a low of 84.08 after which it recovered because of dollar sales from state-owned banks and a rally in the equity markets. The RBI intervenes in the market through state-run banks.

Anuj Choudhary, research analyst at Sharekhan by BNP Paribas, said the rupee is expected to trade with a negative bias on overall strong dollar amid renewed geopolitical tensions in West Asia following Israel’s killing of a top Hamas leader.

“Volatility in crude oil prices may also weigh on the rupee. However, any intervention by the RBI may support the rupee at lower levels. USD-INR spot price is expected to trade in a range of ₹83.90 to ₹84.30,” he added.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading nearly 0.30 per cent lower at 103.53.

The flat close for the rupee came on a day India’s forex reserves dropped $10.746 billion to $690.43 billion for the week ended October 11 in one of the largest decreases in the kitty in recent times, the RBI said on Friday.

In the previous reporting week, the reserves had dropped $3.709 billion to $701.176 billion.

At the end of September, the reserves had hit an all-time high of $704.885 billion.

Gold reserves decreased $98 million to $65.658 billion during the week.

Gold soars

Traditional safe haven gold has hit a fresh all-time high on Friday, breaking above the $2,700 mark for the first time.

Gold prices hit record highs on Thursday as uncertainty surrounding the US presidential elections and the war in West Asia prompted investors to seek out the safe-haven asset, while easing monetary policy environment kept prices elevated.

Gold has seen a surge of over 30 per cent this year, surpassing record levels, driven by prospects of further US Federal Reserve rate cuts after a half percentage point rate cut last month.

In India, gold hit a record high of ₹79,900 per 10 gram on Friday in the national capital, rising ₹550 on strong festive season demand.

The precious metal of 99.9 per cent purity had closed at ₹79,350 per 10 gram in the previous trade on Thursday.

“On top of the concerns in West Asia, you are also nearing the US election, which is looking like a very closely contested election. And that generates a whole host of uncertainty, and gold often is the place to go in times of uncertainty,” Nitesh Shah, commodity strategist at WisdomTree, said.

Gold prices are expected to rise to $2,941 a troy ounce over the next 12 months, delegates to the London Bullion Market Association’s annual gathering predicted earlier this week.

Gold, which yields no interest on its own, tends to gain when interest rates are cut. The European Central Bank also cut interest rates by quarter-point.

With inputs from Reuters