The Indian rupee may slip to an all-time low on Tuesday with the currency, already under pressure from slowing growth, choppy equity flows and a dollar rally, will have to contend with an unexpected widening in trade deficit to a record high.

The local currency settled at Rs 84.90 per dollar as the Reserve Bank of India (RBI) intervened in the foreign exchange market via dollar sales

India’s trade deficit expanded to a record high in November, as the nation’s import bill ballooned, particularly due to a rise in gold shipments.

The Indian rupee weakened to its lifetime low on Tuesday, hurt by concerns about a widening trade deficit and likely outflows from local equities, although intervention by the central bank capped losses.

India's trade deficit hit a record $37.84 billion in November, driven by gold imports and declining exports, pressuring the rupee further.