MUMBAI, July 22 Reuters The Indian rupee closed nearly flat on Monday after slipping to its weakest level on record earlier in the session amid a decline in the Chinese yuan, although dollar sales by staterun banks helped cap further losses in the domestic currency.

The rupee ended at 83.6575 against the U.S. dollar, nearly unchanged from its close at 83.6625 in the previous session. The currency hit an alltime low of 83.6775 earlier on Monday.

Despite healthy portfolio inflows, the rupee has remained under pressure in recent trading sessions.

Foreign investors have poured 5 billion into Indian equities and debt so far this month, per NSDL data, but the Reserve Bank of India likely absorbed a large part of the inflows, spurring a jump in foreign exchange reserves to a record high of 667 billion.

The RBI39;s absorption of dollar inflows alongside heightened dollar demand from local importers, including oil companies, has kept the currency under pressure.

The central bank39;s routine twosided interventions have ensured that volatility remains muted while also capping gains in the currency, which by one measure is the most overvalued in sixandahalf years.

Asian currencies were mostly weaker on Monday, with the offshore Chinese yuan down 0.1 at 7.29 after the country39;s central bank unexpectedly cut interest rates.

China39;s clear bias for more stimulative policy is keeping the entire Asian FX complex on the back foot … we think the market will be focusing on…