The rupee fell in afternoon trading driven by a pickup in purchases by domestic oil importers and USD/INR looks set to test its next resistance at 52.50.
Worries about the economy in the near term and drying capital inflows got fresh fuel after Macquarie's Asia hedge fund exited its short positions in Indian single stock futures citing a controversial set of proposed tax rules.
The rupee is currently at 52.3850-52.3950, after closing at 52.07-52.08 on Friday, and many traders expect the central bank to intervene around 52.50. It had risen to 52.0150 in early trades.
After 52.50, the next level of resistance is seen around 52.95-53.00 level, which is 76.4% of the December-February fall.
