Indian rupee falls to 81.60/USD on suspected RBI dollar purchases

The Indian rupee breached 81.50 to the U.S. currency on dollar purchases by public sector banks, which traders suspected could be on behalf of the Reserve Bank of India.

The rupee USDINR was at the day's low of 81.60 to the dollar, down from 81.3250 in the previous session. The local currency had opened at 81.2425.

Public sector banks have been on the bid, and at least on the face of it, they are doing it for RBI, a trader at private sector bank said.

Add to that a mix of the normal importer demand, profit-taking on short dollar positions, and a waning rally in Asian currencies.

The offshore Chinese yuan was at 6.7250 to the dollar after rallying above 6.70 earlier in the session.