Look for the Indian rupee to be further pressured as investors test the resolve of the Reserve Bank of India. After falling to 60 to the dollar as the central bank kept rates on hold on Tuesday with no additional steps to defend the currency, the rupee has now surrendered all gains since the RBI announced it would defend the currency in mid July. Indeed, the central bank has now said it may withdraw measures in a “calibrated” manner if the rupee stabilizes. Given it is unlikely the currency stabilized in three weeks, investors are rightfullydoubting the RBI and the safe strategy for speculators is to sell. It’s already hovering near a record low and it’s not too late for it to go lower, particularly against the U.S. dollar which is strengthening on its own fundamentals. The Indian government is planning measures to narrow the current account deficit but that is just one of the many problems facing the Indian economy and is not going to help the rupee near term.