MUMBAI, Jan 6 Reuters The Indian rupee declined to its lifetime low on Monday, hurt by a persistent bearish outlook on the South Asian currency that has been troubled by a broadly stronger dollar and tepid capital flows following a slowdown in economic growth.

The rupee weakened to 85.84 against the U.S. dollar, inching past its previous record low of 85.8075 hit in the last week of December.

The currency ended the session at 85.8275, down nearly 0.1 on the day.

While the rupee remained under pressure throughout the day39;s trading session, dollarselling intervention by the Reserve Bank of India helped limit losses, traders said.

It seems like the RBI will hold it USDINR below 86 before Trump39;s inauguration later in January, a trader at a foreign bank said, referring to the start of U.S. Presidentelect39;s term on Jan. 20.

The dollar index was down 0.3 at 108.5 on Monday, retreating from an over twoyear high, but that did little to help the local currency in the face of strong dollar bids in the local spot and in the nondeliverable forwards NDF market.

The proximity to Trumps inauguration and the strong underlying narrative of a hawkish Fed may well keep any USD correction shortlived, ING Bank said in a note.

The 110 target for the dollar index remains very much at reach, in the coming weeks, the note said.

Dollar demand from foreign banks, likely on behalf of custodial clients, also weighed on the rupee during the session, traders said.

Benchmark Indian…