Indian rupee slips to 81.75 on stop losses, possible dollar outflows

The Indian rupee extended losses against the U.S. currency on Monday on likely stop losses and dollar outflows, traders said.

The rupee was down 0.5% to the dollar at 81.7500, a rank underperformer among Asian peers. The offshore Chinese yuan was up 0.9%, leading Asian currencies higher.

The inability of the pair (USD/INR) to move below 81 last week in the face of positive news is probably leading to interbank reconsidering short rupee positions, a trader said.

There is talk of an MSCI rebalancing-related dollar outflow but we have doubts on how likely that is, another trader said.