MUMBAI, Dec 4 Reuters The Indian rupee logged its weakest closing level on record on Wednesday, hurt by a lingering deprecation bias and broadbased dollar bids while dollarrupee forward premiums extended their decline.

The rupee closed at 84.74 against the U.S. dollar, its lifetime closing low, down from 84.6850 in the previous session.

The rupee was unable to benefit from gains in most of its Asian peers, including the offshore Chinese yuan which rose 0.2 to 7.28 after hitting a oneyear low on Tuesday.

At this point, USDINR is a buy on any dips, a trader at a large private bank said. There is only one direction of travel right now but the speed depends on how stiffly the Reserve Bank of India will act, the trader said.

The RBI was likely conducting dollarrupee buysell swaps in the midtofar tenors on Wednesday, traders said which weighed down forward premiums.

The 1year dollarrupee implied yield fell to a fourmonth low of 1.95, having declined nearly 30 basis points over three sessions.

While selling forward dollars allows the RBI to stave off impact on headline foreign exchange reserves and rupee liquidity, a large decline in premiums can add to challenges in curbing further weakness, analysts said.

The dollar index was up 0.1 at 106.5 as attention turned to the potential of a rate cut by the U.S. Federal Reserve this month. Remarks from Fed Chair Jerome Powell will be in focus later in the day.

The RBI will deliver its policy decision on Friday, with traders…