Strong equity markets and a return to risk aversion saw a lesser demand for the dollar. Also, the early part of month sees lesser demand from oil importers. Forex dealers have said that there has been a lesser demand for the dollar, though foreign funds have been net sellers in equities.
The rupee has been one of the worst performing Asian currencies this year, on the back of weakening economic fundamentals. The twin deficits of fiscal and current account have played on the downfall of the rupee.
The Reserve Bank of India has been intervening, but not to a large extent. The Central Bank authorities have made it clear that they would intervene only to curb volatility and not to prevent the rupee from falling.