The Indian rupee slipped to its weakest closing level on record on Monday, pressured by a decline in the offshore Chinese yuan and broad-based dollar bids amid a prevailing bearish bias on the local currency.

The rupee dropped to the lowest value ever for the first time as the depreciation, driven by a consistent nine-day demand for the dollar and end-of-month currency contract expiries.

Indian Rupee hits record low at 85.81 per dollar, driven by RBI actions, market activity, and speculation, experts say.

The Indian rupee weakened to an all-time low on Friday, hurt by persistently strong dollar demand in the non-deliverable forwards (NDF) market, while likely intervention by the Reserve Bank of India (RBI) capped the currency's losses.

According to analysts, the Reserve Bank's stance to hold on to its dollar payments in short-term forward contracts added to the shortage of greenback, with importers rushing to meet their month-end payment obligations.