MUMBAI, Dec. 17 -- The Indian rupee hovered at record low levels against the US dollar on Wednesday, briefly slipping past the 91-per-dollar mark before paring losses after the Reserve Bank of India (RBI) stepped in through buying by state-owned banks, taking it to around 90.5.

After closing at 91.0325 against the US dollar on Tuesday, the Indian unit hit an intraday low of 90.0963 on Wednesday, according to Bloomberg data.

Economists and market participants broadly agree on one point: this is not a current account crisis. India's external fundamentals remain intact, with the current account deficit hovering around 1-1.3% of GDP-levels that were easily financed in the past.

Pressure on the rupee is instead emanating from the capital ac...