The Indian rupee weakened past 85 per dollar on Thursday, hitting an all-time low as the Federal Reserve’s scaling back of its rate cut projections for 2025 battered Asian currencies.

The rupee hit a low of 85.0850 against the U.S. dollar before closing at 85.07, down 0.1% on the day.

The Reserve Bank of India’s (RBI) likely dollar-selling intervention helped the rupee fare better than most of its Asian peers, which declined by as much as 1.2%.

While dollar bids were broad-based, those from foreign banks were especially “strong”, suggesting likely outflows from Indian stocks, a trader at a private bank said.

India’s benchmark equity indexes, the BSE Sensex and Nifty 50, ended lower by about 1% each, posting their fourth consecutive daily fall.

The Fed on Wednesday cut its benchmark interest rates by 25 basis points, but policymakers revised the number of rate cuts anticipated through 2025 down to two, from the four projected in September, and also raised their inflation forecasts.

The dollar index dipped below the 108 handle in Asia trading after rising to an over two-year high earlier in the day. U.S. bond yields extended gains, with the 10-year Treasury yield touching a peak of 4.54%, the highest since May.

Central banks across emerging market countries scrambled to defend their struggling currencies as the Korean won dropped to its weakest level in 15 years, while the Indonesian rupiah hit a four-month low.

“U.S. rates are expected to remain at higher levels for longer thereby creating a wider policy divergence with other major central banks,” MUFG Bank said in a note.

Elevated rates, alongside the risk of higher tariffs being imposed at the start of U.S. President-elect Donald Trump’s second term, will keep upward pressure on the dollar heading into 2025, the lender said.