The Indian rupee is likely to hover near its lifetime low on Friday, after US inflation data reinforced expectations that the Federal Reserve will hold interest rates higher for longer.

The South Asian currency traded on a flat note at 83.24 against the US dollar (22.68 against the dirham) on Friday morning — just short of its record low of 83.29 (22.69).

Forex analysts said the Indian currency continued to stay under pressure due to unabated foreign fund outflow amid negative equity markets across Asia.

"It looks like the familiar narrative will play out. USD/INR will be well bid on weak Asia, which will match up to belief that RBI will intervene," a spot trader at a Mumbai-based bank said.

The Reserve Bank of India has been intervening to prevent the currency from slipping to a record low, and the expectations that the central bank will sell dollars are "deep rooted" at present, he said.

Market participants will also be on the lookout for any pre-open US dollar sales from the RBI in the non-deliverable forward market, a foreign exchange trader at a private bank said.

The dollar index climbed, US equities declined and Treasury yields rose after headline US consumer price index rose 0.4 per cent month-on-month in September, slightly higher than expected. The more important core measure rose 0.3 per cent.

The data suggested that more rate hikes by the Fed remained a possibility, or the US central bank was at least likely to hold rates higher for longer, analysts said.

"With core and headline inflation running at or above 0.3 per cent m-o-m for a second month in September, the Fed will find it difficult to declare victory in getting inflation back to the 2 per cent target soon," DBS Bank stated in a note."