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

MUMBAI (Reuters) - 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.

(Reporting by Nimesh Vora; Editing by Janane Venkatraman)